Capital Goods ITC claim

[narendra patel]

Suppose a capital good (purely for business purpose) is purchased for 80,000. on 1.4.2018.

So CGST part will be 7200. We avail 1/5 part (1440) for current year and put reversal entry of 5760.

Now, in next year we claim next 1/5 part (1440).

My question:

1. Do we claim next year ITC on 1.4.2019 or 31.3.2020 (ie exactly 1 year after purchase or at the end of next FY) 2. Under which section of GST, do we claim ITC of next year.

3. Under which section of GST, do we enter reversal enter of current year.

Please advise.

AI Summary

Full Input Tax Credit for Capital Goods Claimable in Purchase Year under GST, Experts Confirm A forum discussion focused on claiming Input Tax Credit (ITC) for capital goods under the Goods and Services Tax (GST) regime. A participant queried about whether ITC should be claimed annually over five years or fully in the purchase year. Experts clarified that under GST, full ITC can be claimed in the purchase year, unlike the pre-GST era, where it was split over two years. The discussion also touched on rules and sections of the CGST Act and Rules, emphasizing the need to consider usage for taxable versus exempted goods. Participants debated the implications of depreciation and block credit provisions.