GST- ITC Eligibility in case of Exchange

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When exchanging an old item for a new one under GST, the input tax credit (ITC) you can claim is based on the reduced invoice value of the new item. This means you deduct the market value of the old item from the new item's price before calculating the eligible ITC. You cannot claim the full GST paid on the original price if an exchange has reduced the taxable value.

Pooja Mehta

Pooja Mehta (Querist)
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29 September 2025 Dear Members,
I am registered under GST, I have purchased new printer on which GST was charged & i exchanged old printer too so, my invoice value was reduced by value of old printer in market value as of today. My query is can i avail full GST paid on new value of printer or should i reduce it to proportion of old value of TV?
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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 September 2025 The GST input tax credit (ITC) that can be availed for your new printer purchase should be based on the reduced invoice value, after accounting for the exchange and deduction of the market value of your old printer, not the full GST charged on the original price before exchange. Under GST law, when consideration for a transaction is partially in money and partially in kind (such as exchanging the old printer), ITC eligibility depends on the actual taxable value shown on the invoice post-exchange.

Therefore, you can only claim the GST ITC paid on the net value of the new printer—i.e. the invoice amount after reducing the old printer’s exchange value—and not the GST charged on the unadjusted price.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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29 September 2025 Good luck..

Pooja Mehta

Pooja Mehta (Querist)
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11 October 2025 Thank you for your reply

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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11 October 2025 You are welcome.

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