ITC REVERSE ON CAPITAL GOODS IF UTILISE FULLY
This query is : Resolved
Suresh S. Tejwani
(Querist)
20 May 2026
Where ITC on capital goods is fully utilise in 4 years, is liability arise for reversal of ITC on capital goods??
If yes as per which provision?
If monthly ITC utilise is more than ITC reverse which is only of capital goods ??
than which action to be taken according to law?
If yes as per which provision?
If monthly ITC utilise is more than ITC reverse which is only of capital goods ??
than which action to be taken according to law?
20 May 2026
Reversal Obligation: Yes, liability arises. Under Rule 43 of the CGST Rules, capital goods have a statutory life of 5 years (60 months). Utilizing the ledger balance in 4 years does not exempt the asset from reversal if it is used for exempt/non-business purposes in the 5th year.
Procedural Action: No structural changes are needed if utilization is higher than the reversal. Simply calculate the monthly proportionate reversal ($T_m$), declare it in Table 4(B)(1) of GSTR-3B, and maintain an asset-wise ITC tracker for audit safety.
Procedural Action: No structural changes are needed if utilization is higher than the reversal. Simply calculate the monthly proportionate reversal ($T_m$), declare it in Table 4(B)(1) of GSTR-3B, and maintain an asset-wise ITC tracker for audit safety.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Tax on Amount transferred in HUF Account
- WRONG GSTR7 ENTRIES ACCEPTED ERRONEOUSLY
- Nursery business
- GST input credit on commercial property
- GST REFUND ISSUE ON PURCHASE OF PLANT AND MACHINERY
- Working on Gold wastage during Melting of old gold jewellery
- TDS on Dashcam rent and allied services
- Urd purchase entry in tally prime
- GSTR-9C filing
- Intimation under section 245
- Subject: Legal Remedy for Removal of Income Tax Demand for AY 2024–25 – Charitable Trust
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
