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ITC claim on capital goods

aswinichari (Student CA IPC / IPCC)     20 April 2021

Student CA IPC / IPCC 
 23 points

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what is the procedure to claim of ITC on capital goods purchase for furtherence of bussiness.
1. if that ITC can be claimed in full r 50%?
2. What is the procedure to claim- propotionate r in full ,pls explain

Sourav (Student)     20 April 2021

 717 likes  12074 points

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If ITC is used for furtherance of business then ITC can be claimed in full but if it is used partly for personal and for sales then proportionate ITC can be claimed.

Common credit for partly personal/ exempted and partly normal sales
The ITC paid for the capital goods will be credited to electronic credit ledger

Useful life of such capital asset will be taken as 5 years from the date of purchase

Now the total amount of input tax credited to electronic credit ledger for the whole useful life will be distributed over the useful life

RENU SHARMA   20 April 2021


 44 likes  855 points

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Agree with Sourav ji
CA Altamush Zafar

CA Altamush Zafar (GST Consultant)     21 April 2021

CA Altamush Zafar
GST Consultant 
 360 likes  6138 points

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ITC on capital goods is to be claimed in full and not in parts as in erstwhile laws. subject to the fact that all other conditions of section 16 and 17 are followed.
If supplies are both exempt and taxable and capital goods are common then the procedure is to claim itc as full and reverse proportionately along with interest for 60 months.

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