Supply of Capital goods on which ITC has been claimed earlier [Section 18(6) of CGST Act] - GST Ready Reckoner - GST

Supply of Capital goods on which ITC has been claimed earlier [ Section 18(6) of CGST Act ] In case of capital goods Where input tax credit has been taken by the registered person shall pay, whichever is higher The amount equal to the input tax credit taken - 5% per at or part thereof, or The tax on the transaction value of such capital goods or plant and machinery determined under section 15. where refractory bricks, moulds and dies, jigs and fixtures are supplied as scrap, the taxable person may pay tax on the transaction value of such goods determined under section 15. Manner of reversal of credit under special circumstances , [clause (b) of sub-section (4) of section 18] For the capital goods held in stock, the input tax credit involved in the remaining useful life in months shall be computed on pro-rata basis, taking the useful life as five years. Illustration: Supposed, Capital goods have been in use for 4 years, 6 month and 15 days. The useful remaining life in months= 5 months ignoring a part of the month Input tax credit taken on such capital goods= C Input tax credit attributable to remaining useful life= C multiplied by 5/60 The reversal amount ,Inputs or capital goods, shall be determined separately for input tax credit of central tax, State tax, Union territory tax and integrated tax. [ Rule 44(6) of CGST Rules ] Where the amount so determined is more than the tax determined on the transaction value of the capital goods, the amount determined shall form part of the output tax liability and the same shall be furnished in FORM GSTR-1. [ Rule 44(6) of CGST Rules ] The amount determined shall form part of the output tax liability of the registered person and the details of the amount shall be furnished in FORM GST ITC- 03 , where such amount relates to any event specified in clause (b) of sub-section (4) of section 18 and in FORM GSTR-10 , where such amount relates to the cancellation of registration sub-section (5) of section 29. [ Rule 44(4 ) of CGST Rules ]