One of my client is doing car wheel alignment service. He had taken Gst GstRegistration. He had paid input tax for his shop work (E.g. - cement for flooring work, Paid for interlock, paint, steel etc..)
1. Can we claim input tax paid on above work ?
2. He also purchased wheel alignment machinery around 13 lakh. Can he claim input on Machinery ?
1). He cannot claim ITC since ITC on Works Contract is specifically BLOCKED U/s 17(5) clause (c) of the CGST Act 2017.
2). Yes your client can claim ITC on Wheel Alignment Machinery being a Capital Goods and the same is being used in the course of business, provided that all the FOUR Conditions as laid down U/s 16(2) of the CGST Act 2017 is satisfied before claiming ITC.
Kindly Note that your client should not claim Depreciation U/s 32 of the Income Tax Act 1961 on the Tax component of the Capital Goods ( Machinery ). The Machinery needs to be capitalized with the amount without GST component in the Balance Sheet. [ Section 16(3) of the CGST Act 2017 ].
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