Vivitha Chemicals Ltd. is a manufacturing company registered under GST in the State of Tamil Nadu. It manufactures two taxable products "Supreme" and "Maroon", and one exempt product "Delight". All purchases are from out

Computation of amount of input tax credit (ITC) credited to Electronic Credit ledger, for the month of October, 2018 S. No. Particulars ITC (₹) (a) Machinery "D" [Note 1] 72,000 (b) Machinery "E" [Note 2] 36,000 (c) Raw material used for manufacturing "Supreme" [Note 3] 84,000 (d) Raw material used for manufacturing "Maroon" [Note 3] Nil (e) Raw material used for manufacturing "Delight" [Note 3] 24,000 ITC credited to Electronic Credit Ledger for the month of October, 2018 2,16,000 Notes: ITC in respect of capital goods used or intended to be used exclusively for effecting supplies other than exempted supplies but including zero rated supplies shall be credited to the electronic credit ledger [Rule 43(1)(b) of the CGST Rules, 2017]. Machinery "D" is used for manufacturing "Supreme" (taxable) and "Delight" (exempt). However, on 1st October 2018, "Delight" got withdrawn from exemption, making it taxable. So, Machinery "D" is used for taxable supplies. ITC = 4,00,000 * 18% = 72,000. Where any capital goods earlier used exclusively for effecting exempt supplies is subsequently also used for effecting taxable supplies, the value of capital goods being machinery 'E' shall be arrived at by reducing the ITC at the rate of 5% for every quarter or part thereof and the amount so arrived shall be credited to the electronic credit ledger [Proviso to rule 43(1)(c) of the CGST Rules, 2017). Thus, ITC on "E" shall be computed as under: Original ITC on Machinery E (purchased 3 years ago, i.e., 12 quarters ago) = 5,00,000 * 18% = 90,000. ITC to be reduced for 12 quarters = 90,000 * 5% * 12 = 54,000. ITC available = 90,000 - 54,000 = 36,000. ITC in respect of inputs used for effecting taxable supplies will be credited in Electronic Credit Ledger. ITC in respect of inputs used for effecting exempt supplies will not be credited in Electronic Credit Ledger [Rule 42 of CGST Rules, 2017]. Raw material for "Supreme" (taxable) = 7,00,000 * 12% = 84,000. Raw material for "Maroon" (exempted on 1st Oct 2018) = 6,82,000. No ITC available as it is used for exempt supply. Raw material for "Delight" (withdrawn from exemption on 1st Oct 2018, so taxable) = 2,00,000 * 12% = 24,000.