When an exempt supply becomes taxable supply then How to avail credit on inputs and capital goods under GST?
Credit on inputs and capital goods exclusively used for such exempted supply is eligible as per Section 18(4) .
Relevant Extract of Section 18(4) of Revised Model GST Law
Where an exempt supply of goods or services by a registered taxable person becomes a taxable supply, such person shall, subject to such conditions and restrictions as may be prescribed, be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock relatable to such exempt supply and on capital goods exclusively used for such exempt supply on the day immediately preceding the date from which such supply becomes taxable:
PROVIDED that the credit on capital goods shall be reduced by such percentage points as may be prescribed in this behalf.