Eligibility of input tax credit

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This query is : Resolved

Rakesh Sarswath (Querist)

01 December 2017 Dear all,

I have purchased a capital good for which I have taken depreciation under IT Act @10% however as per section 16(3) of CGST Act, I am not eligible to take input tax credit of GST charged on such capital goods as I have taken depreciation on the same.
My query is whether I am ineligible to take the ITC of only 10% of such tax component (GST component) or I am ineligible to take the whole of tax component (GST component)?

CA Sukesh Bhatia

CA Sukesh Bhatia (Expert)

01 December 2017 It appears that you have added GST full component in value of Asset while capitalizing it.
Hence, you will not take ITC on full GST component.

CA Anshu Agarwal

CA Anshu Agarwal (Expert)

02 December 2017 If you are not eligible for ITC on a capital goods under GST, GST paid on such capital goods shall become part of cost of such assets and depreciation shall be claimed on total cost.

However, If you are otherwise eligible for ITC of GST paid on such capital goods, then don't add GST in the cost of assets and depreciation shall be claimed on cost without including GST.

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