Treatment of ITC on asset purchased in 2017

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An exporter is seeking advice on using Input Tax Credit (ITC) claimed on assets purchased in 2017, which has remained unutilised. They want to know if this ITC can be set off against tax liability from local sales made recently. Experts have clarified that ITC claimed on assets can indeed be utilised for setting off GST liability on local sales, with no time limit for utilisation. The two-year limit only applies to claiming a refund of accumulated ITC.

Abhiz

Abhiz (Querist)
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14 October 2020 Dear Experts,

Requesting your advice on the below matter.

I am an exporter and raising invoice with 0% of tax (With LUT).

I have purchased some assets for my company In October 2017 and claimed GST input tax credit. I have not utilized this ITC till Aug 2020. Last month i have generated a tax invoice for local sales.

So my query is,
1. Is it possible to set off the tax liability against ITC claimed in 2017 ? (which is not utilized for last 3 years)

2. In case of ITC refund, Refund application should be submitted within 2years of time. Is it possible to set off the ITC which is in the books more than 2 years ?

OR

Should i reverse these inputs?

Please help me with your valuable advice

Thanks In Advance

Lekhraj sood

Lekhraj sood (Expert)
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14 October 2020 You can utilise the ITC claimed on Assets for setting your GST liability on local sales. There is no time limit for utilisation of ITC availed.2 years time limit is there if you want to claim refund of ITC accumulated.

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Abhiz

Abhiz (Querist)
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21 October 2020 Thank you so much sir

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