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export of used capital asset on which input tax credit has been taken, Goods and Services Tax - GST

Issue Id: - 117180
Dated: 22-4-2021
By:- Prasenjit Pal
export of used capital asset on which input tax credit has been taken

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we have purchased a machinery in yr 19-20 on which full input tax credit has been taken. Now we want to export it. can we do it now? what are the conditions ? Is ITC reversal is required?

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Posts / Replies

Showing Replies 1 to 9 of 9 Records

1 Dated: 22-4-2021
By:- KASTURI SETHI

You can export now . No reversal is required.


2 Dated: 22-4-2021
By:- ABHISHEK TRIPATHI

Have a doubt Sir, when the capital goods are supplied in India then there is reversal in light of Section 18 and the calculation will be in accordance with Rule 40(2) or Rule 44(6) r/w Rule 44(1)(b).

Why in export such requirement isn't there?


3 Dated: 23-4-2021
By:- KASTURI SETHI

Sh.Abhishek Tripathi Ji,

Re-examined the issue.

Sir, I agree with you. Reversal is required de jure.


4 Dated: 23-4-2021
By:- Atul Mehrotra

Dear experts.

Since export is a zero rated supply, shouldn't ITC be available based on section 16(2) of IGST Act? Please explain why is there a requirement to reverse proportionate ITC?


5 Dated: 24-4-2021
By:- ABHISHEK TRIPATHI

Dear Atul Sir,

For me it is ambiguous. How will you read S. 16(2) of the IGST and S. 18(6) of the CGST in consonance. On provisions allows you to take ITC on zero rated supplies and the other ask for reversal on supply of capital goods.


6 Dated: 24-4-2021
By:- Vishwanath Bhat

Yes, You can export, ITC reversal depends on transaction value.(GST to be paid remaining ITC or GST on transaction value, whichever is higher)


7 Dated: 25-4-2021
By:- KASTURI SETHI

Section 2(19) of CGST Act says “capital goods” means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business;

In this scenario, the capital goods are being removed after use for two years. It is not as such. Whether removal after use or as such in both ways, the value of such goods will be de-capitalised from the books of account and hence will be out of definition of 'capital goods' .

I humbly request experts to examine the issue in the light of above expression.


8 Dated: 27-4-2021
By:- Punit Agarwal

I believe ITC might be required to be reversed. But there is a safe side to it.

You Export the goods on payment of taxes under section 16(3)(b). It will help you save the Cost of ITC.


9 Dated: 13-6-2021
By:- YAGAY SUN

There is no duty or taxes on Export except on some goods. If there is no accumulation of ITC and Working Capita issue, then, Export under LUT is feasible.


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