ITC taken in GSTR 3B but not recorded in books, Goods and Services Tax - GST

[varsha jain]

Hello Sir, Mr. X has taken ITC in GSTR 3B on Furniture purchased for his Office but has capitalised the GST in books of Accounts in F.y 17-18 (ie. not claimed ITC in Books). In 18-19 he realised his mistake and passed a journal entry in books for the GST Amt thereby reducing the cost of Furniture and claiming the ITC in Books. can he do So?

Posts / Replies

[KASTURI SETHI]

What about the gap between the years 17-18 and 18-19 ? Can you prove that the ITC taken in GSTR 3 B was not utilized ?

[varsha jain]

A person cannot claim both ITC as well as depreciation so on realisation of his mistake he want to reduce the cost of Furniture by the GST amt thereby avoiding claim of depreciation on it.

he wants to take ITC..

[KASTURI SETHI]

Now purchase value of furniture (excluding GST) stands booked in Profit & Loss Account in 18-19. Was it done before preparation of balance sheet for 17-18 ?

[Ganeshan Kalyani]

The first year depreciation is claimed as only in the second year the cost was removed from the asset and debited to expense account. Thus the interest may come on the credit proportionate to depreciation claimed. Further, it is also to be considered that input tax credit on capital asset is not available in full in the first year.