Question 24 - Where the registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax Act, 1961, will ITC be allowed in such cases?

Input tax credit disallowed where depreciation is claimed on the tax component of capital goods under income tax provisions.

Where a registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the Income Tax Act, 1961, the grant of input tax credit on that tax component is precluded under section 16(10) of the MGL, denying ITC for the tax element of capital goods when depreciation has been claimed under income tax provisions.