Whether ITC can be availed on exempted goods when exported?
If you have this question, your response would naturally get influenced because the outward supply being exempted goods. Yes, when your outward supplies are exempt, you shouldn't avail Input Tax credit as per sec 17(2), reproduced below. "Sec 17 (2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies." Now, the catch is what if the exempted goods being exported or otherwise regarded as "zero-rated supply". Lets refresh our knowledge from sec 16 of IGST Act 2017 in this context and build from there. "Sec 16 (1) “ zero rated supply ” means any of the following supplies of goods or services or both, na...