ITC ON CAPITAL GOODS



when capital goods are first purchased and used for both business and personal purpose...how to apportion the ITC for this?
 
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you have to apply rule 43 of the CGST rules 2017 for apportion of ITC .
 
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GST Practitioner

Lets Assume if you are supplying both taxable & Exempted supply the ITC attributes to Exempted supply has to be reverse every month in 3b for 60 months.

Take the full ITC on capital Goods in the month you purchased say 6000/-

from Next month The reversal has to be done in following Manner

6000÷60= 100 monthly ITC
Say exempted supply for the month is 10000/- & total supply is 20000/-


ITC attribute to Exempted supply = 100 x 10000÷20000 = 50/-

So have to reverse the 50/- under 3b under Rule 43

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GST Certification Course



sir my question is...if a person purchased a capital good and used it for both personal and business purpose from the beginning...and he does not have any exempt supplies also...in such a case how to apportion itc..?
 
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GST Practitioner

can you clarify the capital goods being Used as personal Purposes , means what is the capital goods , & how it's being used as personal Purposes ????

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for eg: I am a model registered under gst and I have taxable t/o of 4800000...now I purchased a camera in abroad by paying 500000 and IGST of rs 90000 and this camera is being used for both business and personal purpose..
 
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GST Practitioner

As per Para 4 Schedule 2 any business asset used for private use without any consideration is considered as supply of Services in GST ,

Hence
It's Taxable , now the value to determine without consideration , the Rule 27 of CGST Act follow , The Open Market Value & if the open market value is not available then be the value of supply of services of like kind & quality.

So as per above valuation Rule we can determine the value of supply used in personal purpose & can apply the above formula for reversal of ITC

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thank you sir

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As the gst rules 5% of eligible is deemed towards non business purposes irrespective of actual usage following is the extract: Are used partly for business and partly for non-business purposes, be denoted as ‘D2’, and shall be equal to five per cent. of C2; and
 
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GST Practitioner

its as per rule 42 & query is in regard to capital goods being used as personal use mean rule 43 is applicable

 
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