ITC on Capital Goods used for normal sales
This query is : Resolved
20 February 2020
Hello sir/Madam,
Can anyone explain me the treatment of availing input tax credit in case of capital goods used for business purpose ?
And ITC on useful life will be taken as 5 years is applicable to me in case Capital Goods used for normal sales.
Thanks...
Can anyone explain me the treatment of availing input tax credit in case of capital goods used for business purpose ?
And ITC on useful life will be taken as 5 years is applicable to me in case Capital Goods used for normal sales.
Thanks...
20 February 2020
if you are using the capital goods for the business purpose, please check if they are for the furtherance of your business. If yes, then you can avail ITC on the same.
20 February 2020
Full ITC can be taken at the time of purchase.
In case you sell within 5 years of purchase, proportionate ITC needs to be reversed.
For example - if you purchase a capital asset in Feb 2020 and take ITC of 18000 and sell the same assets after 2 years . You need to reverse 10800 ( unutilised credit for balance life of the asset(18000*3/5)
In case you sell within 5 years of purchase, proportionate ITC needs to be reversed.
For example - if you purchase a capital asset in Feb 2020 and take ITC of 18000 and sell the same assets after 2 years . You need to reverse 10800 ( unutilised credit for balance life of the asset(18000*3/5)
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