Capital goods under gst

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swathi (Querist)

11 June 2017 What does capital good in gst mean?
When can i take itc?
Who can take itc?
When itc should be taken in instalment s?
Or can treat them as revenue expense ?
If i treat as revenue expense will it contradict AS

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

11 June 2017 Capital Goods are defined in Section 2(19). As per this section, Capital Goods means goods, the value of which is capitalised in the books of accounts of the person claiming the credit and which are used or intended to be used in the course or furtherance of business.

Yes. you can take credit on capital goods while using the capital goods used or intend to be used for wholly business purpose

Credit of Input Tax will be available in totality where Capital Goods have been used for effecting taxable supplies and business activity without any restrictions

Registered taxable person shall be eligible to avail ITC credited to the e-credit ledger subject to condition prescribed without restrictions.

swathi

swathi (Querist)

11 June 2017 As per the capital good definition , whatever i do not capitalize is not a capital good .so everyone will book capital purchases as revenue expenditure .if they do so it will contradict As ? This is my doubt

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

13 June 2017 As like current scenario there is no limit on claiming Input credit on Capital goods 50:50 ratio and booking capital expenses as revenue is not possible since there are lot of other issues in various act & audits and also there is no benefit they get booking capital goods to revenue

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