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Subham Sahu   13 March 2019

ITC reverse

Agr kisi ne office me AC lgaya hai and ITC full claim kiya hai then 6month baad AC sale kr diya to kitna ITC reverse hoga?

 6 Replies


Neeraj (Student CA Final )     13 March 2019

tax on transaction value or total itc /60*54 whichever is higher

pritesh (CA Final student)     13 March 2019

As per Rule 44 
You have calculate the ITC for remaining useful life of capital asset & GST on Transaction value (Sale value) whichever is greater is to be deposit.

suppose asset purchase for RS.50000 & paid GST 9000 
>The useful life of asset is 60 months 
> used asset for 4 years (48 months)

To calculate ITC attributable to remains usfule life is = ITC X months remain ÷60
= 9000 x12/60= 1800/-

And if suppose sale value is 9000 & GST is 1620/- 

Then the GST payable will be 1800/- on sale capital asset 
2 Like
Subham Sahu

Subham Sahu   15 March 2019

thank you so much sir

Madhukar N Hiregange

Madhukar N Hiregange (Chartered Accountant)     15 March 2019

Section 18 (6) read with Rule 44(1) (b) specifies that ITC availed is to be reversed based on the value of supply or prescribed value - remaining life ( assumed 5 years is life) - That means after 6 months means 6/60 x ITC. 

Example AC purchased at 1 Lkh- ITC 28k Sold after 6 months at 80k + GST. GST reversal would be a) 80x 28% = 22.4k or 28x 54 (60-6)/60 = 25.2k- higher of the 2 Therefore25.2k. 

1 Like
Subham Sahu

Subham Sahu   15 March 2019

thank you so much sir


mohammad (article assistant)     18 March 2019

madhukar sir how to show this invoice in gstr 1 as my invoice is with amount 80k plus gst and i have to reverse more itc

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