Input tax credit reversal for stock and capital goods uses invoice-based calculations, remaining useful life and prescribed reporting. Input tax credit reversal under Rule 44 covers inputs held in stock, inputs contained in semi-finished or finished goods held in stock, and capital goods ... Summary
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Input tax credit reversal for stock and capital goods uses invoice-based calculations, remaining useful life and prescribed reporting.
Input tax credit reversal under Rule 44 covers inputs held in stock, inputs contained in semi-finished or finished goods held in stock, and capital goods held in stock. Credit attributable to inputs is calculated proportionately by reference to the invoices on which credit was availed. Credit attributable to capital goods is calculated pro rata for their remaining useful life in months, treating the useful life as five years and ignoring part of a month. Where invoices for inputs held in stock are unavailable, the registered person estimates the amount using the goods' prevailing market price on the effective date of the relevant event under section 18(4) or section 29(5). Those details require certification by a practising chartered accountant or cost accountant.
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