Fixed Asset ITC Effect in GSTR3b & Tally entry

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This discussion clarifies the eligibility of Input Tax Credit (ITC) for fixed assets, specifically a car purchased for a private limited company. Generally, ITC on motor vehicles is blocked under Section 17(5) unless the company's core business involves driving schools, car showrooms, or taxi services. If ITC is eligible, it should be booked at the taxable value under Fixed Assets with ITC going to Duties & Taxes ledger in Tally. If ineligible, the entire amount, including ITC, should be capitalised and depreciation claimed on the full value.

ARCHANA

ARCHANA (Querist)

09 February 2022 Sir,

We have purchased car April 2021 in the name of Pvt Ltd company, we have claimed ITC in GSTR3B

Now my question:
This ITC is eligible to claim in GSTR3Bor Not if eligible how much full or any percentage basis.
If we claim in GSTR3B ITC what is the effect in Tally entry full value with ITC Shown or Before ITC

please clarify my doubts.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

10 February 2022 you cannot take ITC of car as it is blocked under section 17(5) unless the company is in the business of :
1. motor driving school
2. Car showroom
3. Taxi service

Message likes : 1 times

ARCHANA

ARCHANA (Querist)

11 February 2022 Thank you sir for your reply

CA. Bhavik P. Chudasama

CA. Bhavik P. Chudasama (Expert)

17 February 2022 Hi,

To be Eligible for ITC on Asset you need to 1st Check Section 16 (to check the conditions of being eligible to claim ITC) & then go for Section 17 whether same is allowable in Part of Full.

if same is eligible you need to Book Asset @ Taxable Value under Fixed Asset & ITC to the Duties & Taxes ledger

if same is not allowable capitalise entire amount in Balance Sheet & Claim Depreciation on Entier Amount including ITC

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