Hello everyone,
As per sec 16(3) we either can claim ITC on Capital Goods or Depreciation on Capital Goods.
However, as per Rule 43 of CGST Act, some ITC needs to be reversed over a period of time.
In this case, the reversed ITC, which earlier were not included as part of cost of the assets and hence depreciation wasn't claimed on the same.
Now due to reversal of ITC, can we add back the same reversed ITC to cost of the assets for claiming depreciation on the same?
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ITC on Capital Goods & Depreciation
Replies (1)
As per section 16(3) if we claimed depression on tax componenent of capital goods then credit is not allowed. Further Rule 43 says when capital goods are used for other than clause (a) and (b) and value of credit is A - and if capital goods are shifted from above clauses then we have to check remaining life or value of capital goods . so at that point we have to reverse the credit and value part reducing 5 Percent per quater.
from above it is clear that the credit part that we already taken as credit can not from part of depressesion.
from above it is clear that the credit part that we already taken as credit can not from part of depressesion.
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