Itc on capital goods...
This query is : Resolved
Ajita Parouha
(Querist)
24 January 2018
Which one is better option ::
1. Either claim credit on capital goods purchased and taking in mind lots of provision like reversal of proportionate credit belongs to exempted goods, credit blocked on motor vehicle, reversal of proportionate credit if capital goods sold within 5 years. In such case can not claim depreciation on tax amount.
Or
2.Do not take GST credit and claim depreciation on whole value inclusive of GST. In such case no need of complex calculations, and accounting entries?? However your deduction will be differed over the years and realized in many years with small amount.
1. Either claim credit on capital goods purchased and taking in mind lots of provision like reversal of proportionate credit belongs to exempted goods, credit blocked on motor vehicle, reversal of proportionate credit if capital goods sold within 5 years. In such case can not claim depreciation on tax amount.
Or
2.Do not take GST credit and claim depreciation on whole value inclusive of GST. In such case no need of complex calculations, and accounting entries?? However your deduction will be differed over the years and realized in many years with small amount.
CMA Ramesh Krishnan
(Expert)
26 January 2018
My suggestion option -1, even though complications, it is better to take input credit on capital goods because Input credit is immediate financial impact on your tax payment
Ajita Parouha
(Querist)
27 January 2018
Thank You for your suggestion Sir !!!
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