Hello,
We have Vendor Invoice transactions where we are not eligible for GST input credit for the full amount of the GST; reason being that the expense is towards 100% GST exempt output service.
For eg. If INR 10000 is being paid for text book purchase, since this is used for a delivering a program which is 100% exempt from GST, the GST applicable for this amount is not recoverable, not a GST expense but has to be added back to the 'Purchase of books' expense head.
We cannot configure 'Load on inventory %' at the HSN level since the eligibility of input credit is based on the nature of expense transaction. If the purchase of books is for a programme which is taxable output, then the GST is recoverable.
The 'non-deductible pct' field in 'Tax Information' is supposed to work for this purpose, but is not working for us. Specifying a percentage is not having any effect on the tax document.
The 'non-business usage %' field transfers the applicable GST amount to separate GST expense account, which does not serve the purpose.
Has anyone in India used this feature? Any inputs on this helps, please.
IIMU
