TMI BlogInput Reversal on Capital GoodsX X X X Extracts X X X X X X X X Extracts X X X X ..... HI, We have taken GST Input earlier on Capital Goods at the time of capitalization. Now as on 31st March 22 we discarded the same as the WDV was zero because the life was three years. as per GST rule the life of Capital goods was 5 Year. so it compelled to reverse rest input, after Input utilizing 5% per qtr for three years. is there any way to save that input. - Reply By SOWMYA CA - The Repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y = Sir, I don't understand how a capital asset is discarded merely because its wdv is zero. The answer to your question is to retain the asset for the full five year period to save input tax - Reply By Murari Kumar - The Reply = It is required due to some reason thanks for your reply - Reply By Ganeshan Kalyani - The Reply = ITC for balance year or GST on sale value whichever is higher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need to be reversed or paid - Reply By Murari Kumar - The Reply = HI, thank for your valuable revert Please suggest how to pay through 3B or DRC-01 - Reply By Shilpi Jain - The Reply = If it's of Mar '22 youn can either choose GSTR-3B or DRC-03 . For the reason that even if paid in 3b it will get reported in GSTR-9 in part 5. If done in DRC-03 , will get reported in tab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 4. - Reply By Shilpi Jain - The Reply = So either way reporting will happen in GSTR-9 - Reply By SHARAD ANADA - The Reply = As you mention in your query it is discarded.Does it mean you stop using it or discarded means Sale (Supply) or disposed off? if it is sale (Supply) then Sec 18(6) will apply. In my view If it not not supply then section 18(6) will not apply. - Reply By Murar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Kumar - The Reply = Thanks Shilpi JI. it is reversal of March 22. Means we can report in other reversal column in GSTR-3B for Apr 22. - Reply By Amit Agrawal - The Reply = Dear Querist, I am not sure I have understood the context of your query. Can you please explain legal provisions under which you feel that you need to be reverse proportionate ITC? Thanks - Reply By Murari Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - The Reply = It is against rule 43 1(c) - Reply By Amit Agrawal - The Reply = Rule 43 deals with a situation where concerned capital goods attract the provisions of sub-sections (1) and (2) of section 17 being partly used for the purposes of business and partly for other purposes, or partly used for effecting taxable supplies including zero rated supplies and partly for effecting exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t supplies . From the facts shared by you in your query, I an not sure how these the provisions of sub-sections (1) and (2) of section 17 are applicable to you. Can you please elaborate? Thanks - Reply By Murari Kumar - The Reply = I Understand but section 43 1(c) says the amount of input tax in respect of capital goods not covered under clauses (a) and (b), denoted as A, being the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount 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 from the date of the invoice for such goods: Provided that where any capital goods earlier covered under clause (a) is subsequently covered under this clause, input tax in respect of such capital goods denoted as A shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be credited to the electronic credit ledger subject to the condition that the ineligible credit attributable to the period during which such capital goods were covered by clause (a),denoted as Tie , shall be calculated at the rate of five percentage points for every quarter or part thereof and added to the output tax liability of the tax period in which such credit is claimed: - Reply By Amit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agrawal - The Reply = As per my understanding of given facts in your query, you are not covered in situation described in Rule 43 (1) (c) including proviso thereunder. Accordingly, I am unable to understand why there is a need to reverse any ITC. If I missed any factual aspects or you are thinking about any other applicable provisions / rules warranting such proportionate reversal of ITC, pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease let me know. - Reply By Shilpi Jain - The Reply = Supply also includes disposal. In this scenario the asset though being said to be disposed, if done for free then a view can be taken that it is not a supply as no consideration. However, it will come into the ambit of sch I entry 1, where liability will exist even if no consideration, as it is a business asset - Reply By Shilpi Jain - The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply = The moment it is a supply, 18(6) gets attracted. It looks unfair under GST since, any asset has a useful life actually of say only 3 years then it is deemed that the credit in proportion to the remaining 2 years will have to be reversed!! - Reply By Amit Agrawal - The Reply = The querist needs to clarify if concerned capital goods are only discarded (i.e. no more being used in busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess though goods are lying idle while WDV is zero as per books of accounts) or disposed off (i.e. goods are given to someone else free of cost, which is no longer part of physical assets held by the assessee) without any consideration. - Input Reversal on Capital Goods - Query Started By: - Murari Kumar Dated:- 10-5-2022 Goods and Services Tax - GST - Got 16 Replies - GST - Discussion Forum - K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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