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How to use capital goods ITC during tax liabilities offset?

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Ramachandran R

128 Points Posted on 17 November 2021

Hi all,

Recently bought some capital goods & got IGST of around 20,000 which would be my ITC

As per rule we have to claim it over 60 months so monthly value comes around 333

My current month tax liability is around 25000 and when i try to offset by limiting ITC to 333, system pops up as use 20,000 fully and go for offset with cash.

How should offset tax when using capital goods ITC

Replies (2)

Quick Summary

This discussion clarifies how to use Input Tax Credit (ITC) from capital goods for offsetting GST liabilities. Contrary to initial assumptions, you can claim and utilise the full ITC amount of capital goods in one go, rather than being restricted to a monthly proportional amount. This allows for immediate offset against your tax dues.