Capital goods credit

[manish kumar]

Sir,

An assessee has taken Capital goods credit after one year. Can we allow 100% credit or allow 50% credit or disallow all capital goods credit. Please suggest me with proper authorities .

[KASTURI SETHI]

Restriction of availing credit within one year was for inputs and input services and not for Capital Goods. If you could not take 50 % in first year, in the next year you could take 100%. Case laws can be traced out. We are talking of pre-GST era.

[Ganeshan Kalyani]

I am also of the view, that in case of capital goods credit not taken in the year of purchase, then in the next month 100% credit can be taken.

[DR.MARIAPPAN GOVINDARAJAN]

You can take 100% credit if you did not take 50% in the first year.

AI Summary

Capital goods credit can be claimed in full in a subsequent period where the initial year claim was not made. Capital goods credit is distinct from inputs and input services: the one year restriction referred to the latter, not capital goods. Respondents state that if the assessee did not claim the prescribed portion in the first year, the entire or outstanding capital goods credit may be claimed in a subsequent period, permitting full recovery of the credit after the initial year; these observations reflect pre GST practice and practitioner commentary rather than cited authorities.