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SECTION 18(2)

Others 1160 views 4 replies
By virtue of Section 18(2) of the CGST Act 2017, A registered person shall not be entitled to take input tax credit under sub-section [1] in respect of any "supply of goods or services or both" to him after the expiry of one year from the date of issue of tax invoice relating to such supply.

Is this applicable for Capital Goods as well ? Is it 1 year or 5 years for Capital Goods ???
Replies (4)
Dear Shivam :

If you refer the Sub Section (1) its say" Input tax Credit in respect of INPUTS held in stock "

&

If we refer the defination of INPUT prescribe in section 2(59) : input means goods other than Capital Goods

Hence it does not include capital Goods
Sir by virtue of Section 18(1)(c) of the CGST Act 2017, When a Composite Dealer migrates to Regular Scheme, he will be eligible to take ITC on inputs in stock, finished goods, semi finished goods and CAPITAL GOODS.

Hence sub section (1) of Section 18 uses the term Capital Goods.

My question is if a Composite Dealer has an invoice of Capital Goods of which 3 years has elapsed from the date of invoice, will he be able to claim ITC on that Capital Goods in Form GST ITC-01 ???

Regards.
Dear Shivam :

Now i got your query ☺️

Yes you can claim ITC upto to 5 years as etimated life of same by reducing the 5% for evry Qtr.

The condition of limit of 3 year ITC on capital goods is in case of principal & job worker (Sec 143)
Sir that means we can claim ITC on Capital Goods even if the Invoice is one year old.
Right???


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