GST rate - latest on scrap of computers, monitors, keyboards,mouse& multimeter

[BSNL STR]

Sir/Madam,

What is the present rate of GST on scrap sale of computers, monitors, keyboards,mouse& multimeter ?

Regards,

CHANDRASHEKAR G

[Alkesh Jani]

Sir, Please clarify that computer, monitor, keyboard, mouse are booked as Capital goods in your books of Account, so that our experts may get the clarity to reply.

[BSNL STR]

Sir,

yes, these items are equipments booked as capital goods.

Regards,

CHANDRASHEKAR G.

[Alkesh Jani]

Sir, In this regards, my point of view is that, the taxable value of the scrap will be the depreciated value of the capital goods and Rate is 18% i.e (CGST+SGST).

Further, if the goods are sold at ₹ 500/- and the depreciated value is ₹ 600/- then the value of the goods shall be ₹ 500/- and taxable value shall be 600/- and GST will be applicable on ₹ 600/- @ 18%. Our experts may correct me if mistaken

[Ganeshan Kalyani]

yes i agree.

[KASTURI SETHI]

Dear Querist,

This is an extract from a case law. Methodology will be useful for you. (Though it pertains to pre-GST-era, yet it is relevant and applicable.

[5(A) (a) If the capital goods, on which Cenvat credit has been taken, are removed after being used, the manufacturer or provider of output services shall pay an amount equal to the Cenvat Credit taken on the said capital goods reduced by the percentage points calculated by straight line method as specified below for each quarter or a year or part thereof from the date of taking the Cenvat Credit, namely.

(i) for computers and computer peripherals :

For each quarter in the first year @ 10%

For each quarter in the second year @ 8%

For each quarter in the third year @ 5%

For each quarter in the fourth and fifth year @ 1%

(ii) for capital goods, other than computers and computer peripherals @ 2.5% for each quarter :

Provided that if the amount so calculated is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.

(b) If the capital goods are cleared as waste and scrap, the manufacturer the manufacturer shall pay an amount equal to the duty leviable on transaction value.]

AI Summary

GST on capital goods scrap: taxable value based on depreciated value, with credit reversal rules applying.
Sale of discarded computer equipment treated as capital goods is taxable under GST on the depreciated value of the capital goods; the advisory states a combined GST rate of 18% and exemplifies that taxable value may exceed sale proceeds. Pre GST Cenvat guidance relevantly required reversal of credit by straight line quarterly percentages for computers and peripherals (and a different rate for other capital goods), with a floor equal to duty on transaction value, and treated clearance as scrap as requiring payment equal to duty on transaction value.