Page 14 - Focus Group

INPUT TAX

APPORTIONMENT &

SPECIAL METHODS

CA Jay Duseja

Input Tax Tax paid by a Person or due from him when Goods or Services are supplied to him, or when

Recoverable Amounts that were paid and may be returned by the Authority to the Taxpayer pursuant to
Tax the provisions of this Decree-Law.
Residual Input tax which is incurred in respect of goods or services which are used partly for making
Input Tax supplies that allow for VAT recovery and partly for making supplies for which VAT is not
recoverable

Note-1: To make this crucial topic user friendly, it has been presented in Q&A format. Further, I would
suggest the users to read the Article # 54 of DL & Article # 55 of ER for completeness and to share if there
are alternate views in any of the points in this article. Many Thanks.

Q1: Who must apply the Input Tax apportionment?

• Persons/Businesses who provide mixture of exempt supplies as well as taxable supplies, can claim
only partial input tax on common/residual expenses and are required to comply with Input Tax
apportionment rules. Please refer diagram below:

14 TAX JOURNAL 2020 The Institute of Chartered Accountants of India (Dubai) Chapter NPIO