Sunrise Hotels Limited supplies both VAT-exempt and VAT-taxable services. In Q1 2024, its taxable supplies amounted to ₦60,000,000 and exempt supplies amounted to ₦40,000,000. Input VAT incurred on general overheads was ₦2,800,000. Using the partial exemption standard method, what is the recoverable input VAT?

The partial exemption standard method apportions input VAT based on the ratio of taxable supplies to total supplies. Taxable ratio = ₦60,000,000 ÷ (₦60,000,000 + ₦40,000,000) = 60%. Recoverable input VAT = 60% × ₦2,800,000 = ₦1,680,000. The remaining ₦1,120,000 relates to exempt supplies and is irrecoverable under the VAT Act (as amended by the Finance Acts).