Rule 42 & 43 ITC Reversal Calculator
Rule 42 (inputs / input services) & Rule 43 (capital goods) reversal working
Rule 42 — Common Credit Reversal (Inputs & Input Services)
Monthly working under Rule 42 of CGST Rules, 2017.
Illustration 1 — Trader with taxable + exempt sales
May 2026: total ITC ₹10,00,000 (IGST 6L, CGST 2L, SGST 2L). ₹50,000 used for the director's residence (T1), ₹1,00,000 exclusively for exempt sales (T2), ₹50,000 blocked u/s 17(5) (T3), ₹4,00,000 exclusively for taxable supplies (T4). Turnover: exempt ₹20,00,000 of total ₹1,00,00,000.
Expected: C2 = ₹4,00,000; D1 = 20% × C2 = ₹80,000; D2 = ₹20,000; reversal ₹1,00,000.
Illustration 2 — Hospital (mostly exempt supplies)
Total common ITC ₹5,00,000 (CGST 2.5L, SGST 2.5L), no T1/T3, T2 ₹50,000, T4 ₹50,000. Exempt (healthcare) turnover ₹80,00,000 out of ₹1,00,00,000.
Expected: C2 = ₹4,00,000; D1 = 80% = ₹3,20,000; D2 = ₹20,000; reversal ₹3,40,000.
Figures are illustrative and meant for demonstration / training use.
Credited directly to ECL — no reversal
| Particulars | IGST | CGST | SGST | Cess | Total |
|---|---|---|---|---|---|
| C1 = T − (T1+T2+T3) | 0 | 0 | 0 | 0 | 0 |
| C2 = C1 − T4 (Common Credit) | 0 | 0 | 0 | 0 | 0 |
| D1 = (E/F) × C2 [E/F = 0.00%] | 0 | 0 | 0 | 0 | 0 |
| D2 = 5% of C2 (deemed non-business) | 0 | 0 | 0 | 0 | 0 |
| C3 = C2 − (D1 + D2) (Eligible Common Credit) | 0 | 0 | 0 | 0 | 0 |
| Total Reversal in GSTR-3B (D1 + D2) | 0 | 0 | 0 | 0 | 0 |
Report D1 in Table 4(B)(1) and D2 in Table 4(B)(1) of GSTR-3B (since the 2022 amendment, both flow through Table 4(B)). Annual recomputation must be done by 30th September of the next FY and any short reversal paid with interest under Section 50.