TMI BlogManner of determination of input tax credit in respect of capital goods and reversal thereof in certain casesX X X X Extracts X X X X X X X X Extracts X X X X ..... or intended to be used exclusively for effecting supplies other than exempted supplies but including zerorated supplies shall be indicated in 19 [ 6 [ **** ] FORM GSTR-3B] and shall be credited to the electronic credit ledger; 7 [ Explanation: For the purpose of this clause, it is hereby clarified that in case of supply of services covered by clause (b) of paragraph 5 of the Schedule II of the said Act, the amount of input tax in respect of capital goods used or intended to be used exclusively for effecting supplies other than exempted supplies but including zero rated supplies, shall be zero during the construction phase because capital goods will be commonly used for construction of apartments booked on or before the date of issuance of completion certificate or first occupation of the project, whichever is earlier, and those which are not booked by the said date. ] 14 [ (c) the amount of input tax in respect of capital goods not covered under clauses (a) and (b), denoted as A, being the amount of tax as reflected on the invoice, shall credit directly to the electronic credit ledger and the validity of the useful life of such goods shall extend upto five years f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schedule II of the Act, the value of E/F‟ for a tax period shall be calculated for each project separately, taking value of E and F as under: E= aggregate carpet area of the apartments, construction of which is exempt from tax plus aggregate carpet area of the apartments, construction of which is not exempt from tax, but are identified by the promoter to be sold after issue of completion certificate or first occupation, whichever is earlier; F= aggregate carpet area of the apartments in the project; Explanation1: In the tax period in which the issuance of completion certificate or first occupation of the project takes place, value of E shall also include aggregate carpet area of the apartments, which have not been booked till the date of issuance of completion certificate or first occupation of the project, whichever is earlier. Explanation 2: Carpet area of apartments, tax on construction of which is paid or payable at the rates specified for items (i), (ia), (ib), (ic) or (id), against serial number 3 of the Table in notification No. 11/2017-Central Tax (Rate) published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated 28th June, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble, consequent to change of rates of tax on 1st April, 2019, which shall be calculated as under, - E2= [Carpet area of such apartments] x [V 1 / (V 1 +V 2 )],- Where,- V1 is the total value of supply of such apartments which was exempt from tax; and V2 is the total value of supply of such apartments which was taxable E3 = aggregate carpet area of the apartments, construction of which is not exempt from tax, but have not been booked till the date of issuance of completion certificate or first occupation of the project, whichever is earlier: F= aggregate carpet area of the apartments in the project; Tc final = aggregate of A final in respect of all capital goods used in the project and A final for each capital goods shall be calculated as under, A final = A x (number of months for which capital goods is used for the project/ 60) and,- (a) where value of Te final exceeds the aggregate of amounts of Te determined for each tax period under sub-rule (1), such excess shall be reversed by the registered person in FORM GSTR-3B or through FORM GST DRC-03 in the month not later than the month of September following the end of the financial year in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the 13thOctober, 2017. ] 13 [ Explanation 2: For the purposes of rule 42 and this rule,- (i) the term apartment shall have the same meaning as assigned to it in clause (e) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (ii) the term project shall mean a real estate project or a residential real estate project; (iii) the term Real Estate Project (REP) shall have the same meaning as assigned to it in in clause (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (iv) the term Residential Real Estate Project (RREP) shall mean a REP in which the carpet area of the commercial apartments is not more than 15 per cent. of the total carpet area of all the apartments in the REP; (v) the term promoter shall have the same meaning as assigned to it in in clause (zk) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (vi) Residential apartment shall mean an apartment intended for residential use as declared to the Real Estate Regulatory Authority or to competent authority; (vii) Commercial apartment shall mean an apartment other than a residen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal airports to the incoming passengers. ] ******************** Notes:- 1. Inserted vide notification no. 55/2017 dated 15-11-2017 2. Substituted vide Notification No. 3/2018 Dated 23-01-2018, before it was read as, 1 [Explanation - For the purposes of rule 42 and this rule, it is hereby clarified that the aggregate value of exempt supplies shall exclude the value of supply of services specified in the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 42/2017-Integrated Tax (Rate), dated the 27th October, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number GSR 1338(E) dated the 27th October, 2017 3 Inserted vide Notification No. 03/2019-Central Tax dated 29-01-2019 w.e.f. 01-02-2019 4 Omitted vide Notification No. 03/2019-Central Tax dated 29-01-2019 w.e.f. 01-02-2019 before it was read as (a) the value of supply of services specified in the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 42/2017-Integrated Tax (Rate), dated the 27th October, 2017 published in the Gazette of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common credit in respect of capital goods for a tax period: Provided that where any capital goods earlier covered under clause (b) is subsequently covered under clause (c), the value of A arrived at by reducing the input tax at the rate of five percentage points for every quarter or part thereof shall be added to the aggregate value T c ; 16. Inserted vide Notification No. 16/2020 Central Tax dated 23-03-2020 w.e.f 01-04-2020 17. Omitted vide Notification No. 16/2020 Central Tax dated 23-03-2020 w.e.f 01-04-2020 before it was read as (f) the amount of input tax credit, at the beginning of a tax period, on all common capital goods whose useful life remains during the tax period, be denoted as T r and shall be the aggregate of T m for all such capital goods; 18. Inserted vide NOTIFICATION NO. 14/2022 Central Tax dated 05-07-2022 19. Omitted vide NOTIFICATION NO. 19/2022 Central Tax dated 28-09-2022 w.e.f. 01-10-2022 before it was read as, FORM GSTR-2 5 [ and FORM GSTR-2 6 [ and 20. Omitted vide NOTIFICATION NO. 38/2023- Central Tax dated 04-08-2023 before it was read as, (c) the value of supply of services by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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