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ITC on Capital Goods

09 April 2019

What if i claim ITC for capital goods should i take the ITC at a time or for 60 months and what about Depreciation on it
Capital Goods is for Business Use

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4 Replies

CA Ankit Garg (MD | Genuine Filings) (781 Points)
Replied 09 April 2019

GST component is to be claimed in 60 installments and on balance amount of asset claim depreciation

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CA Aravind Penugonda (Chartered Accountant) (311 Points)
Replied 09 April 2019

Hi Hitesh,

There is no restriction placed in GST law to claim ITC on Capital goods at once. In the earlier regime, assessee can claim only up to 50% of credit in the first year and the balance in the subsequent years. However, no such restriction in GST law. Accordingly, you can claim 100% ITC on CG in the first year itself.

Further, it is relevant to note here that benefit of depreciation under IT Act, 1961 cannot be claimed on ITC component. Depreciation benefit can be claimed on balance component. (Ref: Section 16(3) of the CGST Act, 2017)

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