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

Input tax credit on capital goods may be availed in full in purchase year; reversals required for exempt use.
ITC on capital goods used wholly for taxable supplies may be availed in full in the year of purchase; the one year restriction concerns only the period for taking credit, not its utilisation. If capital goods are partly used for exempt supplies or non business use, reversal or proportionate allocation applies, commonly spread over an assumed five year life, and specific GST allocation, reversal and blocked credit provisions govern the procedural mechanics.