ITC ON PURCHASE OF CAPITAL GOODS

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This discussion clarifies the Goods and Services Tax (GST) Input Tax Credit (ITC) on capital goods for newly registered businesses. For businesses making only taxable supplies, the full ITC on a new CNC machine can generally be claimed in the same month of purchase. However, if capital goods are used for both taxable and exempt supplies, the ITC must be claimed proportionately over 60 months. It's also important to note that ITC on the GST component included in depreciation is disallowed, and there are time limits for claiming ITC.

RAJA P M

RAJA P M (Querist)
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18 March 2024 Respected Experts,
I have a confusion about ITC on CAPITAL GOODS. One of my client (newly registered under GST) purchased of New CNC machine. They make only taxable supplies & Services (like Job work) with chargeable 12% GST.
I will take that full ITC in the same month. But, Having confusion with this

In this scenario can we claim fully ITC of that purchased capital goods...?
or Here we calculate and take ITC proportionately...?

Please clarify my confusion with suitable details.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 March 2024 Credit of tax paid on capital goods is permitted to be availed in one instalment.

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RAJA P M

RAJA P M (Querist)
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18 March 2024 Thank You Sir...
Thank You for the Confirmation...

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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18 March 2024 You are welcome..
.

RAJA P M

RAJA P M (Querist)
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18 March 2024 Sir,
I want a CMA data preparation tool through excel or any other mode.
If possible then please share...
Is ther any available...???

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 March 2024 See the link for download .
https://www.caclubindia.com/share_files/download-cma-report-maker-in-excel-auto-calculates-cma-data-82231.asp

RAJA P M

RAJA P M (Querist)
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19 March 2024 Thank You Sir, But, it's not working properly. I already try this.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 March 2024 Other experts please reply thank you.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 March 2024 Other experts please reply, thank you

Aashok Kumar Sharma

Aashok Kumar Sharma

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16 August 2025 Don’t forget the time bar: ITC for capital goods must be claimed by the earlier of the due date for the September return of the following year or the annual return filing date. Also, if capital goods are used partly for exempt supplies, ITC must be reversed proportionately over 60 months. Finally, if the GST component is included in depreciation, the ITC on that portion is disallowed under GST law.

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