Sec (19) of CGST Act states “capital goods” means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business.
Goods will be regarded as capital goods if the following conditions are satisfied:
(a) The value of such goods is capitalised in the books of account of the person claiming input tax credit;
(b) Such goods are used or intended to be used in the course or furtherance of business.
Input Tax Credit Rules in case of capital goods:
Rule 8 of the ITC rules deals with ITC in case of capital goods.
b. The amount of ITC (in full) in respect of the capital goods used or intended to be used exclusively for effecting taxable supplies including zero-rated supplies shall be credited to the electronic credit ledger.
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