Input Tax Credit Claim on A.C

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A client purchased an air conditioning unit on 29th March 2022 and then opted for the composition scheme from 1st April 2022. The question is whether they can claim Input Tax Credit (ITC) on the AC. Generally, once a taxpayer opts for the composition scheme, they cannot claim ITC. However, the ITC on the AC could have been claimed in March 2022, before the composition scheme began. As the composition scheme was opted for in April 2022, any accumulated ITC would have lapsed. It's advisable to consider claiming depreciation on the GST component of the AC instead.

Javed Memon

Javed Memon (Querist)
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07 April 2022 Client has purchased A.C on 29-03-2022 and he has opted Composition Scheme From 01-04-2022
Can he take benifit of ITC on A.C. ??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 April 2022 In view of composition scheme opted no ITC can be claimed.

CA Puja Sharma

CA Puja Sharma (Expert)
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07 April 2022 Yes, he could have taken the ITC in March 2022.
However, as mentioned the tax[ayer opted for a composition scheme in April 2022 so the accumulated ITC in the ledger would have lapsed.
It's better to take the depreciation benefit on the GST component of the AC.

Javed Memon

Javed Memon (Querist)
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07 April 2022 Can I Claim And fully Utilised ITC For tax Payment ?

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