I have supplied both taxable and exempted goods by using taxable input. I have purchased a capital goods during the month of January 2018 but started commercial production and outward supply during the month of January 2019. What is the treatment of ITC of during the period January 2018 to January 2019 specially during the time from the date of purchase to commercial production and outward supply.
(1) For the computation of life period of capital goods whether date of invoice or date of commercial production correct?
(2) If the date of invoice is the right answer, then, is it correct to allow the ITC for the non production period?
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Treatment of ITC of capital goodsfor non production period for a starting business
Replies (1)
As per Section 16 , the full credit available to you on the day as per Invoice. so the credit will be lying in your credit ledger till January 2019.
1. As per Rule 43(1)(c) , validity of 5 years will be counted from date of Invoice.
2 Yes even though during Non production period the ITC available.
The question of ITC available during that period is as per Section 16 of CGST Act , & Reversal need to be be done when it is used for non-taxable/Exempted supply as per Section 17(1)(2) of CGST Act .
1. As per Rule 43(1)(c) , validity of 5 years will be counted from date of Invoice.
2 Yes even though during Non production period the ITC available.
The question of ITC available during that period is as per Section 16 of CGST Act , & Reversal need to be be done when it is used for non-taxable/Exempted supply as per Section 17(1)(2) of CGST Act .
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