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ITC ON CAPITAL GOODS

deepak v (43 Points)

25 August 2019

Should I pay tax while I sell my capital goods purchased in VAT regime where ITC was claimed?

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8 Replies

Anirban Sinha (CA in service) (727 Points)
Replied 25 August 2019

Yes you have to pay tax..

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deepak v (43 Points)
Replied 25 August 2019

relevant section pls?

pradeep goyal (Senior Partner) (7561 Points)
Replied 25 August 2019

entry 1 of schedule I with section 7 of CGST

deepak v (43 Points)
Replied 25 August 2019

ok..there it is mentioned where input tax credit has been availed...
now ITC as defined in section 2(63) is credit of input tax.
as per section 2(62) input tax is CGST/SGST/IGST. If that is the case how can the credit of VAT be considered as ITC for the purpose of GST

pradeep goyal (Senior Partner) (7561 Points)
Replied 25 August 2019

If we go as per strict interpretation, you are right but here intention is if any tax credit is taken earlier, it is taxable. If we consider your view, still it is taxable as sale of business asset fall in definition of supply and tax be levied on transaction value.