COMMON CREDIT FOR TAXABLE/BUSINESS PURPOSE AND EXEMPTED OR NIL RATED /NON-BUSINESS PURPOSE

1. Credit in such a case would be restricted to the extent of use in taxable supplies for taxable on business purpose.
2. Rules provide as to how the amount attributable to such supplies is to be calculated and to Electronic Liability Register on provisional basis added to Electronic Liability Register on provisional basis. 
3. The ratio of amount to be reversed is based on aggregate value of exempted/non-business purpose supplies and total turnover in the State during the tax period. In case these figures for the relevant tax period are not available, figures for last tax period can also be taken
4. Common credit is arrived at by deducting amount of credit of input tax used exclusively in taxable supplies from the total credit.
5. Once common credit figure is available, 5% of it would be straight forward disallowed in case it represents amount of input tax towards non-business purpose This amount would be added in Electronic Liability Register.
6. Where supplies consist of both taxable and exempted/non-taxable supplies, formula for arriving at the amount attributable to exempted supplies is- Common Credit (Value of exempted supplies/Total turnover) Common credit. This amount would be added in Electronic Liability Register.
7. Final calculations will be made for the whole financial year before the due date of filing the return for September of the next financial year. Difference, if any, would be payable with interest of 18% from 1st of April till date of payment. If amount provisionally paid is in excess, difference shall be claimed as credit within the month of September of next year.