Section 7 –Schedule I—CGST ACT, 2017
Permanent transfer/disposal of business assets on which Input Tax Credit has been availed
In the event of sale or transfer of business assets i.e. capital goods on which Input Tax Credit was availed – the transaction shall be treated as supply even when these are cleared or transferred without consideration, and the business is liable to pay GST.
Issue/Query
Since there is no consideration involved at the time of transfer (or disposal) of the asset on which ITC has been claimed.
As per the stated law, the taxable person must return the benefit of ITC availed originally on the transferred asset (transferred without consideration).Secondly; it is required to consider such transfer as his output supply.
You are requested to translate the above-mentioned stated law into accounting entry. Since there is no consideration involved at the time of transfer, what shall be the sale price to charge GST so as to record the transaction as output supply .
Explain all what is prescribed in CGST Act,2017-Schedule I –Entry I with the help of accounting entries
Do we need to take the book value or original value of the transferred asset ?
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