(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.
Therefore, you may restrict input tax credit, as prescribed under Rule 42 of the CGST Rules, 2017.
Q. By mistake we did not pay GST @ 5 per cent on transport charges. We understand we can pay GST @ 5 per cent and claim ITC credit. Now, if we pay GST for year 2017-18, can we avail ITC credit till March 31, 2019 or April 20, 2019, as per your article in BS? Is ITC for 2017-18 available only for bills raised by our vendors on us or is it available also for GST paid by us on reverse charge basis for 2017-18?
You may refer to S. Nos. 8 and 9 of the notification 8/2017-Integrated Tax (Rate) dated June 28, 2017 (as amended) and the corresponding notifications under the CGST and SGST laws. There, under headings 9964 and 9965, a number of transport services attract the 5 per cent rate provided credit of input tax charged on goods/services has not been taken or in some cases, such credit is not utilised for paying the tax. You may determine which entry is applicable in your case. Secondly, the decision of GST Council at its 31st meeting to give further time to claim ITC for FY 2017-18 invoices till due date of filing GSTR-3B of March 2019 has been given effect to through CGST (Second Removal of Difficulties) Order 2018 dated December 31, 2018 (Order no. 2/2018-Central Tax) issued under Section 172 of the CGST Act, 2017. It amends Section 16 (4) of the CGST Act, 2017.