Meaning of capital goods

Capital goods" means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business;

AGREED with @ inderjeet saini 

and one more thing ITC on capital goods can be claimed 100% at once unlike earlier in Excise .

According to section 2(19) of the Act, “capital goods” means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business;

Further, the following points to be noted:

1. Assuming that the value of capital goods was not capitalised in the books of account, the person purchasing such capital goods would still be eligible to claim input tax credit on them since the definition of ‘input tax’ applies to goods that are not capitalized;

2. Capital goods lying at the job-workers premises would also be considered as ‘capital goods’ in the hands of the purchaser as long as the said capital goods are capitalized in his books of account.

Capitalized value of capital goods may include services as an incidental component of a composite supply.

DEFINITION OF "CAPITAL GOODS" as per GST Act 2017 :

As per the Provision of Section 2 clause (19) of the CGST Act, 2017 :

"Capital Goods means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business."

INTERPRETATION :

All those goods which are capitalised in the books of account ( i.e. Balance Sheet ) is regarded as Capital Goods. ITC on Capital Goods is always available subjected to the Provision of Section 17(5) of the CGST Act 2017 ( i.e. BLOCKED CREDIT ).