Proper Officer Should follow Formulae u/r 42 and 43 to Compute Utilization of GST ITC and Reversal Thereof: Calcutta HC

The Calcutta High Court has clarified that the proper officer should strictly follow the formulae prescribed under Rules 42 and 43 of the GST Rules to compute the utilization of GST Input Tax Credit (ITC) and its reversal. This ruling emphasizes the importance of adhering to the statutory mechanism for calculating ITC adjustments, particularly for exempt supplies or non-business purposes. The court's directive ensures uniformity and transparency in the calculation process, preventing arbitrary or inconsistent assessments by tax authorities. It provides clarity to taxpayers on the precise method to be adopted for ITC apportionment and reversal, thereby minimizing disputes and promoting compliance with the intricate GST credit system.