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ITC Rules on Sale and Purchase for Capital Goods under GST with Example

ITC Rules on Capital Goods under GST

After the implementation of GST, it was significant to the under various provision regarding the ITC availability in the matter of sale and purchase of capital goods under GST regime. Here we have taken consideration of various provisions mentioned in the CGST and IGST rulebook of GST and sections mentioned thereafter.

ITC Rules on Sale of Capital Goods under GST with Example

The definition of “capital goods” under Section 2 (19) of CGST Act means goods, the value of which is capitalized 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. Input Tax Credit (ITC) plays the significant role in calculating and claiming the taxes under the ambit of Goods and Services Tax (GST).

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    Questions Regarding the Availability of ITC on ‘Sale of Capital Goods’ such as:-

    • Is that GST will be charged on the Sale of Capital Goods purchased before the implementation of GST?
    • What is the procedure on Sale of Capital Goods bought post-GST implementation?
    • Is that any obligation on the sale of Capital Assets is not applicable?
    • How to handle with loss/ damage of assets in the case when ITC is not applied?
    • What is the procedure under GST on sale/ disposal of capital goods when Input Tax Credit (ITC) is applied?

    GST Provisions on Sale of Capital Goods

    In this whole article, we will discuss the provisions regarding the sale/transfer/ disposal of capital goods to address the issues of people. Here we will cover the relevant provisions that are to be discussed, the topics are given below:-

    ‘Schedule II’ of CGST Act Para 4 (a), Activities to be considered a supply of Goods or Supply of Services

    Where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, whether or not for a consideration, such transfer or disposal is a supply of goods by the person.

    For invocation of above compliances it is necessary to satisfy 3 conditions below:-

    • Any of the goods forming part of the business assets; or
    • transferred or disposed of so as no longer to form part of business assets; or
    • by or under the directions of the person carrying on the business

    The manner the provision framed under GST Act makes it applicability very broad. When all of the above conditions are fulfilled, GST will be applicable at the prescribed rate of the asset on the value mentioned under section 15 of the CGST Act.

    It does not matter:-

    • Whether the transaction is done with or without consideration
    • Is that ITC has been provided on goods or not
    • Whether the goods belong to before or after the implementation of GST

    The Para regarding ‘assets of business’, that may be considered either current assets or fixed assets. Therefore, particular ‘assets of business’ para, will be applied to both either ‘capital goods’ or other ‘goods’.

    It must be noted that above we mentioned that the transfer or disposal made by or under the directions of the person carrying on the business. Any of the loss or damage occurs through theft, fire, accident and natural calamity will not be considered supply and GST will not be levied on such assets.

    Schedule 1 of the CGST ACT Para 1: Activities To Be Treated As Supply Even If Made Without Consideration

    Under Schedule 1 of CGST Act Para 1, mentioned the activities that are to be considered as supply even if made without consideration are given below:-

    • Permanent transfer or disposal of business assets where input tax credit has been availed on such assets.
    • Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business:
      Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an employee shall not be treated as the supply of goods or services or both.
    • Supply of goods—
      • by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or
      • by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.
    • Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business

    Section 18 of CGST Act– In case of supply of Capital Goods

    In case of supply of capital goods or plant and machinery, on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher.

    Under section 18 of CGST Act, dies, moulds and jigs, refractory bricks, fixtures and jigs to be treated as scrap, the registered person under GST Act may pay taxes on transaction value of such goods prescribed under section 15.

    Conditions and restrictions in case of supply of goods on which ITC has been taken below is payable:-

    • An amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by such percentage (given in Rule 44(6) below); or
    • The tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher

    Rule 44 (6) CGST Rules

    1) The amount of inputs tax credit relating to inputs held in stock, inputs contained in semi-finished and finished goods held in stock, and capital goods held in stock shall, for the purposes of subsection (4) of section 18 or sub-section (5) of section 29, be determined in the following manner, namely,-

    • for inputs held in stock and inputs contained in semi-finished and finished goods held in stock, the input tax credit shall be calculated proportionately on the basis of the corresponding invoices on which credit had been availed by the registered taxable person on such inputs;
    • for capital goods held in stock, the input tax credit involved in the remaining useful life in months shall be computed on the pro-rata basis, taking the useful life as five years.

    Illustration:

    • 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 is taken on such capital goods= C
    • Input tax credit attributable to remaining useful life= C multiplied by 5/60

    2) The amount of input tax credit for the purposes of sub-section (6) of section 18 relating to capital goods shall be determined in the same manner as specified in clause (b) of sub-rule (1) and the amount shall be determined separately for input tax credit of IGST and CGST.

    Provision of Rule 44(6):

    • Provided that 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

    Now two conditions may arise that are given below:-

    • The transaction with consideration: If in a case amount of ITC calculated for balance useful life as described in Rule 44 (6) of CGST Act as compared to the tax calculated on the transaction value.
    • If Amount of ITC is greater (>) than tax and the registered person is to be paid that much amount and same should be treated as Output tax liability. The similar amount to be furnished in GSTR 1 Return Form. That means for businesses, it is necessary to prepare tax invoice and the most interesting point is that taxable value has to be reverse calculated and that value may be different from actual consideration received.

    Let us Understand with an Example

    Purchasing Value of Assets is Rs 50,0000 + 18% of GST is (9000) = Total Value of Asset is Rs 59,000, ITC Taken = Rs 9,000

    So ITC of balance useful life = 9000*5/60 = Rs 750 (Amount)

    Let’s assume actual consideration amount is Rs 4000. Tax calculated = 4000*18% = Rs 720 (Tax Amount)

    Now comparison of Amount and Tax i.e., Rs 750 and Rs 720 respectively. The amount is higher as compared to taxes. However, the registered person under GST will have to pay Rs 750 and should be furnished in GSTR- 1 Form. Therefore, it is necessary to prepared tax invoices in this case with invoice amounting Rs 4000 plus 7750 is equal to Rs 4750. However, taxable value to be furnished in the invoice, as well as GSTR – 1 Form, will be Rs. 4167.

    When ITC Will Not be Available on Capital Goods are Given Below

    However such cases we have already covered above in schedule II Para 4 (a). Here again, two similar situations arise are as follows:-

    1) Transaction with consideration: In this circumstances, GST will be payable according to applicable rate and it is necessary to prepare tax invoices and should be reported in GSTR 1
    Form.

    2) Transaction without consideration:- Here again aforementioned scenario arise:- If in case supply of goods is unintentional including lost, stolen, destroyed, written off or disposed of and so on. It will not be considered the supply of goods and no GST will be levied in such cases.

    If in case the transaction is intentional such as gifts, that circumstance creates the problem. Under Para 4(a) of CGST Act formulates specific provision so as to be treated as supply without consideration and here to be paid taxes. For calculating taxes, the value of supply will be determined according to valuation rules.

    Read Also: List of Goods and Services Not Eligible for Input Tax Credit

    ITC Rules in Respect of Capital Goods for Purchasing under GST with Example

    Below are some of the circumstances for determination of Input Tax Credit (ITC) regarding Capital Goods and reversal if any while purchasing:-

    Input Tax Credit will not be provided in the following conditions:

    • a) Capital Goods used specifically for non- business purposes or personal use
    • b) Capital Goods used specifically for exempting supplies

    Input Tax Credit will be provided in totality where Capital Goods have been used for effecting taxable supplies and business activity without any restrictions

    • c) Amount of input tax determined in 1 and 2 should be furnished in GSTR- 2 Form and the only point2 will be credited to electronic credit ledger.
    • d) Where Capital Goods is either used for exempting and taxable or for personal use/non- business will be calculated in the following way:-
      • I. Such amount shall be credited to Electronic Credit Ledger
      • II. Useful life of such capital goods shall be taken to be 5 years from the date of purchase
      • III. Now the total amount of input tax credited to Electronic Credit Ledger w.r.t. whole useful life such common capital good shall be distributed over the useful life. Credit for a tax period = input tax credited to Electronic Credit Ledger/60 (5years * 12 months)
      • IV. The above amount shall be calculated for all such common capital goods for every tax period namely a month
      • V. The amount of credit to be added to output tax liability attributable to exempt supplies out of input tax for common use of capital goods shall be: Credit attributable to exempt supplies = Value of exempt supplies/Total Turnover * Credit for a tax period
      • VI. Remaining amount after deducting credit attributable towards exempt supplies will be allowed as ITC
      • VII. All of the above calculations must be done separately for Central tax, State Tax, Union Territory Tax and Integrated Tax
    • E. Where a capital good which was earlier used or intended to be specially used for: Non- business purpose & Effecting exempt supplies
      • Later to be used commonly for Business a non-business purpose & Effecting taxable and exempt supplies
      • Input tax to be credited to electronic credit ledger would be: Input Tax – 5% of Input tax for every quarter or part thereof

    Let us Understand the Situation through an Example

    Mr Avinash bought a Capital Good intended to be used for effecting exempt supplies only, for Rs 1,00,000/- paying Rs 18,000 as input tax on 01/04/2017 and now on 15/11/2018, he wishes to use the capital good commonly for taxable and exempt supplies.

    Now the eligible common input tax credit will be calculated as follows:

    = Input Tax – 5% of Input tax for every quarter or part thereof
    = 18,000 – 5% of 18000 * 3 quarters
    = 18,000 – 2,700
    = 15,300

    Now Mr Avinash will credit Rs 15,300 to Electronic Credit ledger and follow the steps shown in point D to calculate the input tax attributable to exempt supplies out of common credit

    • F. Where a capital good which was earlier used, or intended to be exclusively used for effecting taxable supplies and business purpose
      • Later to be used commonly for Business and non-business purpose & Affecting taxable and exempt supplies
      • Input tax to be credited to electronic credit ledger would be:
      • = Input Tax – 5% of Input tax for every quarter or part thereof

    Manner of Reversal of Credit Under Certain Cases

    There are certain cases regarding input tax credit will be added to output tax liability:-

    • Where a normal taxpayer opts to pay tax under composition scheme or goods and/or services supplied by him become exempt
    • In case of supply of capital goods or plant and machinery, on which input tax credit has been taken
    • Every registered person whom registration is cancelled

    Input tax credit involved in the remaining useful life in months shall be computed on the pro-rata basis, taking the useful life as five years.

    Illustration:

    • 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 is taken on such capital goods= C
    • Input tax credit attributable to remaining useful life = C multiplied by 5/60
    • Above calculation can be calculated separately for IGST and CGST

    Capital Goods Sent on Job Work

    • Where capital goods including plant & machinery have sent to a job worker for job work, the credit of input tax shall be allowed to the principal manufacturer.
    • Such goods must be received back within a period of 3 years of sending out or else it shall be treated as supply on the date on which goods was earlier send and tax would be payable along with interest for late payment of taxes
    • Where capital goods have been sending directly to job worker after the purchase of such capital goods, the period of three years would be calculated from the date of receipt of such goods by the job worker.

    Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

    Published by Subodh Kumawat
    Subodh has done with numerous professional degrees ranging from Human Rights to Banking along with MBA in HR Marketing. He is also interested in the field of tax-related articles and blog as per the industry based norms. Having expert knowledge in diverse sectors, he assures facts and figures along with testimony, in his articles. Working in SAG Infotech, he is a trusted author among the readers globally. View more posts
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    102 thoughts on "ITC Rules on Sale and Purchase for Capital Goods under GST with Example"

    1. the Asset purchased as second hand (Old Goods/Pre GST purchase) . it has sold after used 12 years. Is GST applicable in this case.

    2. sir, I have purchase mobile for my self on my friend gst. Can he claim input gst against purchse.
      what will be the process, and can he refund gst amount to me yes or not let me know.

        1. I purchased machine and gst availed , now exporting this machine please clear for gst Return

    3. what if the purchased capital asset is an interstate transaction and we have paid igst on purchase and now we are selling this asset within the same state and will pay cgst n sgst.
      Tax on transaction value =51000*18%= 91800
      or
      credit attributable to remaining useful life 180000-(180000*40%) i.e. 108000
      whichever is higher i.e. 108000
      now my question is how reporting to be done in GST return of this transaction???????????? and also the treatment of itc when itc claimed on purchase is igst and output liability on sold transaction is of CGST and SGST………?????

    4. i hv one question sir if i have purchased one computer can i claim input of tax of that & also claim depreciation on taxable value ?

    5. Hi Sir,
      We have an electricals business and bought a laptop on Firms name with GST on the invoice. Please guide if we are eligible to get the ITC for this laptop? We are not selling this product, using it for our own purpose.

    6. I have purchased a Laptop(Fixed Asset) in Jul-2018 and availed GST ITC Credit on it.

      In Jan-20 Laptop was stolen, Shall I reverse the ITC in accordance to Rule 44 & how to show the GST ITC reversal in returns GSTR-3b/GSTR-1

    7. Sir,

      Last year, we bought a capital good fully use for taxable supply but by mistake, the ITC claim in GSTR3B is according to the rules of partly taxable & partly exempted supplies. And also not reverse until September’2020 in GSTR 3B. Please let me know if we can correct on GSTR9

    8. E. Where a capital good which was earlier used or intended to be specially used for: Non- business purpose & Effecting exempt supplies
      Later to be used commonly for Business a non-business purpose & Effecting taxable and exempt supplies
      Input tax to be credited to electronic credit ledger would be: Input Tax – 5% of Input tax for every quarter or part thereof:

      [Example: Mr. Avinash bought a Capital Good intended to be used for effecting exempt supplies only, for Rs 1,00,000/- paying Rs 18,000 as input tax on 01/04/2017 and now on 15/11/2018, he wishes to use the capital good commonly for taxable and exempt supplies.

      Now the eligible common input tax credit will be calculated as follows:

      = Input Tax – 5% of Input tax for every quarter or part thereof
      = 18,000 – 5% of 18000 * 3 quarters
      = 18,000 – 2,700
      = 15,300

      Now Mr. Avinash will credit Rs 15,300 to the Electronic Credit ledger and follow the steps shown in point D to calculate the input tax attributable to exempt supplies out of common credit]

      Request:
      The quarters from 01.04.2017 to 15.11.2018 should be 7 Quarters. Please look into this problem and reply.

      1. Capital goods ITC can be claimed in 5years hence total ITC on CG first will be divided by 5 for calculating Yearly ITC amount Then 5% rule applied and for more details please go through Rule 43 of CGST act 2017.

    9. Sir, I have a question of GST RELATED TO CAPITAL GOODS
      MY CLIENT PURCHASE SOME MACHINERY WHEN THEY START BUSINESS BEFORE 2 YEARS AND CLAIM ITC NOW HIS BUSINESS IS BREAKDOWN CAN HE SALE THIS MACHINERY TO ANOTHER WITH GST 🙏🙏

      1. “In case of supply of capital goods or plant and machinery, on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by such percentage points as may be prescribed or the tax on the transaction value”

        1. Sir i have purchased Machinery in current year and paid 90,000 GST on Value now my question is how can i claim ITC in single shot in next month or by way of installments? If installments pls clarify the method…waiting

    10. Dear sir,

      We have installed one ESP and after payment of GST invoices, we booked the value including GST for capitalization. During commissioning the ESP got damaged due to an explosion. We scrapped it and replaced the ESP with a new one. After receiving the assessment of loss, we reversed value including the ICT booked in our books, deposited the amount through treasury challan to the Department.

      Insurance company denies for GST amount in claim stating it was done wrong.

      Can you guide us?
      Regards, A K Sethi

      1. “Summary of GST Taxability on Sale of Capital goods. Section 18(6) of the CGST act simply states that in case of sale of capital goods, any credit taken in respect of capital goods has to be reversed as calculated as per Rule 44 and added to the output tax liability for the month.”

    11. Sir, I have purchased a JCB in 2018, not availed any input credit anyway, got registered GST in Feb19, using the JCB for TAXABLE SERVICES? HOW TO CLAIM THE INPUT NOW

    12. If capital goods are purchased on an installment basis, how to take input on capital goods
      Eg: capital goods cost Rs.1 crore and Gst thereon Rs.18,00,000/-, This Rs.1,18,00,000 is paid on monthly EMI to Supplier on 36 Months (along with interest), and supplier gives a monthly invoice for interest paid. in this situation how to take input on capital goods i.e at the time of purchase of capital goods or proportionate basis or after payment of the final installment.

    13. On the sale of capital goods, whether we need to just reverse the ITC calculated as per rules

      or

      we have to do both-ITC reversal as well as tax liability on sale transaction of capital goods

    14. My question is

      I have purchased a capital good (machinery) before GST law came, no ITC was availed in any other law, I am selling the same asset as it is not efficient in the production so now is GST applicable to me, if yes then what will be the rate and what will be the value on which GST all be applicable

    15. Hi everyone,

      As the export of goods is zero-rated, will I need to reverse ITC (Sec 18(6)) on fixed assets if it is to be exported/discarded to foreign buyers under LUT?

      ITC on original fixed assets had been taken in the GST regime.

      Thanks in advance.

    16. The firm purchased machinery and imported some machinery for the production of exempted goods hence no ITC has taken worth Rs 1 cr now wdv is 75 lakh

      The firm wants to sell machinery in 80 lakh what will be GST impact

      Gst will be On 5 lakh (80-75) or 80 lakh or no GST?

    17. Sir, I have purchased machinery in October 2018 and it is used for manufacturing of exempt item,(ITC on such purchase has not been reversed yet) but in fact, the machinery has not been used since purchase. Now I want to sale the machinery, can I claim such ITC on purchase against the sale of such machinery now??

    18. We are pvt Ltd. company & we are purchasing building which will available after complete of CLP Payment & we are paying payment 10% or 5% on CLP System. How we can claim Input GST & Depreciation on this.

      1. In case of supply of capital goods on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher.

        GST is payable on transaction value which is the actual amount paid or payable for the goods and services.

    19. If we sell/dispose of off furniture purchased in 2015, would such sale attract GST and if yes, at the same rate as per the relevant HSN code?

    20. In the current scenario, where we are not filing GSTR-2, in which form of return (GSTR-1 & GSTR-3B) and at which place should we add the amount of ITC on Capital Goods, attributable to Exempt Supply, to increase the outward tax liability?

    21. Thank you very much for such an informative article on the subject matter. I request you to help me with one more question on the same topic.

      As suggested by you, the portion of the ITC attributable to Exempt supply should be ADDED TO THE OUTWARD LIABILITY. My confusion is as follows

      In the current scenario, where we are not filing GSTR-2, in which form of return (GSTR-1 & GSTR-3B) and at which place should we add this amount to increase the outward tax liability.?

      1. In GSTR-3B in eligible ITC tile you have to show the amount of ITC attributable to exempt supplies under the heading “as per rules 42 and 43” the Net ITC available shall be calculated by subtracting this ITC shown here i.e. ITC reversed. If net ITC available is negative then it will be added to output liability of GSTR-3B.

    22. I have purchase sundry capital goods for my new flat (Non- Business) with my company name & GSTIN. Can I claim ITC on it? such items also available in GSTR-2A.

        1. Sir, whether I can encash ITC directly in the bank account, which taken on capital goods rather set off in 60 installments?

    23. Dear Sir/Madam,

      Our Business transportation & we have purchased new Farana (Crane),
      We can claim ITC 100% in GST ???

      Reply to me…

    24. Hi,

      I have purchased capital goods for supplying exempt services. Now, i want to dispose off this asset. I haven’t claimed any input against this asset. So, now at the time of sale of such capital goods do I have charge GST on it?

    25. One of my clients is executing job work services, whether ITC needs to be reversed in 60 equal instalments. In the normal case of manufacture of goods and sale thereof, whether Reversal of ITC is required to be made in sixty months considered to be the useful life of the asset?

    26. I had an inter-unit transfer of capital asset under returnable challan (rule 4 (5) a, in pre-GST regime. It was to our own SEZ unit not we have decided to keep it permanently at SEZ unit. Is there any ITC reversal which was taken in Excise regime.

    27. Sir,

      If I Purchase a Machinery for the service job. can I claim The credit input of GST and depreciation both?

      If I can claim please mention the clause in the answer.

    28. SIR

      I PURCHASE MACHINE AND RECORDED IT IN THE ASSETS IN THE BALANCE SHEET EXCLUDING GST PAID SO THAT I CAN CLAIM ITC BUT WHERE TO SHOW ITC AMOUNT I AM CONFUSED.

    29. Dear sir,

      I purchased capital goods pre GST (the year 2016) and cenvat credit and vat credit taken on the time of purchase now we are selling those capital goods. Please tell me about the reversal of credit so how we can charge GST and what percentage.

      1. You must have filed TRAN-01 for claiming input of pre-GST credit. no reversal is required to be made. you have to normally charge GST. Since permanent transfer or disposal of capital assets even without consideration on which credit has been taken is considered as a supply under GST

    30. Regarding availment of GST on capital goods 100%. Please clarify if this is applicable for availment as well as for utilisation of input credit. In case of utilisation we need to claim in 60 instalments or what.

      1. If the capital goods are fully used for taxable supplies, then 100% ITC can be availed and utilized. If such capital goods are partially used for taxable supplies and partially for exempted supplies, then 60 instalments rule will apply for utilization of ITC.

    31. I WANT TO SELL MY CAPITAL ASSETS IN WHICH NO VAT INPUT IS CONSIDERED AT THE TIME OF PURCHASE. NOW I WANT TO SELL MY CAPITAL ASSETS THAN GST

      IS APPLICABLE ON IT AND IF APPLICABLE THAN HOW ITS CALCULATE.

      IS GST IS APPLICABLE FULL SALE CONSIDERATION?

      OR ON WDV VALUE

    32. WHETHER GST IS APPLICABLE ON SALES OF CAPITAL ASSETS WHERE CAPITAL ASSETS WERE USED FOR EXEMPTED SUPPLY.

      1. Since capital assets were used exclusively for the supply of Exempted goods, therefore no ITC can be claimed on such capital asset. Under GST, the sale is not treated as a supply where ITC is not availed on assets. so no GST will be payable in your case.

      1. you can take ITC, Depreciation also you can claim to the extend of Excluded of ITC amount.
        For Exm,
        Value Of assets 50000
        IGST 18% 9000
        TOTAL 59000
        you can take ITC Rs 9000
        and Claim Dep For Rs 50000 Not 59000.

    33. We have a assets purchase before GST Regime now we want to sale it. Should we charge GST on it?? and if yes then on which amount and which rate?

    34. Sir, We purchased capital goods for the supply of Taxable goods, in this case, we can take ITC 100% at one time?
      please reply

    35. We are in a business of renting computers & printers. We give computer & printers on monthly rental basis & charge GST as per applicable rate.

      Here, my question is “what is the treatment of Input Tax Credit of GST on Computer & printers” which we give on rental & which are our fixed assets (capital goods)?

        1. We are a computer, Laptop, server renting business in Chennai. can u please advice me what section available in GST? Please send me for our clarification.

          1. We are a computer, Laptop, server renting business in Chennai. we also purchase the fixed asset how much percentage take capital goods input tax credit against liability. take 100% or input tax/60 months. please send me clarification.

    36. If we are shifting capital goods from one unit to another unit which is interstate how should be calculated the input tax and avail the same as a credit while invoicing on products produced.

      1. As per Schedule-I of CGST Act, 2017 supply of goods between distinct persons of same establishments as per Section 25(3) shall be considered as supply and shall be chargeable to tax. In this case being different units of the same company shall pay IGST on interstate transfer of capital goods and shall avail input tax credit os same in GSTR-2 or GSTR-3B in the same manner as other credits are availed.

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