Proportinate itc concept in gst on sale on used car

[Shubham Porwal]

Hello everyone... I am new user here ...please help me ...! If one purchased furniture for rs 1lac and gst 28,000 total 1,28,000 and sold it just after 2years... what shall be the impact on itc ...will it be claimable upto rs 28,000 or any proportionate reduction should be made .....?

Please reply....!

Thanks

Shubham

[Alkesh Jani]

Sir,

If purchased furniture is booked as capital goods in your books of Account, than 5 point per quarter is to be reduced.

If not booked as capital goods, then it is normal supply.

Our experts may correct me if mistaken.

Thanks

[Shubham Porwal]

Sir The asset is used for office purpose (i.e he doesn't deal purchasing and selling of furniture) so why there is reduction in itc ....? Because the furniture one time will become obsolete and if we reduce itc ...then there can be loss to client .....!

Please help me to gain knowledge

[Alkesh Jani]

Sir, It will be very difficult for me to explain your query raised, but to reduced ITC is for the compliance of law.

Thanks

[Shubham Porwal]

Thank you so much sir for your valuable time

[CSSANJAY MALHOTRA]

Mr Alkesh, your views are correct t as to initial query raised by querist but he change his query in his second post.

Mr. Shubham, please go through schedule -1 of supply specifically clause (a) . Hope u will find answer.

[YAGAY andSUN]

We endorse the views of experts.

[Alkesh Jani]

Sir, Thank you Sh. SANJAY MALHOTRAJI, for explaining the querist. It is really very difficult for me to explain “why” and I extend my apology to the querist for not furnishing the explanation.

Thanks

[KASTURI SETHI]

Sh.Alkesh Jani Ji,

I would like to suggest as under :-

(i) Use the word, 'Clarification' and NOT, Explanation'. Explanation conveys something different. We are to use the word, "clarification"

AI Summary

Proportionate ITC reversal on capital goods: periodic reduction required when sold, otherwise normal supply treatment applies. If furniture is recorded as capital goods, the purchaser must proportionately reduce claimed ITC by applying a five percentage point reduction per quarter as a reversal mechanism when the asset ceases to be used in taxable activity. If the furniture is not capital goods, its sale is treated as a normal supply without that periodic ITC adjustment. The discussion also refers to Schedule-1 clause (a) for related supply definitions.