ITC Reversal on Capital goods

In which account head, ITC reversal on capital goods is to be accounted.

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Quick Summary
This discussion clarifies how to account for the reversal of Input Tax Credit (ITC) on capital goods under GST. The reversal should be recorded under the taxation head. Specifically, you'll debit the Capital Goods account with the reversal amount and credit the relevant IGST/SGST/CGST account. This process effectively increases the value of your capital goods while reducing the corresponding ITC balance.

ITC Reversal should be under GST under taxation head
Dr Capital Goods
Cr IGST/SGST/CGST

being ITC revesed ob capital goods
Increase the value of capital goods with the amount of reversal and decrease the corresponding itc head.

ITC reversal on capital goods can be accounted on GST under taxation head

 

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