Lumpsale of Capital Goods

[Bhupesh Dand]

Dear Sir,

What is the GST Impact on Lumpsum

sale of Capital goods ? Ratof GST and also if ITC was availed and where in ITC was not availed ?

Regards,

Bhupesh

[KASTURI SETHI]

If ITC has been taken:

The assessee shall pay the amount equal to ITC taken as reduced by 5% point as per Rule 40(2) of CGST Rules or on transaction value determined under Section 15 of capital goods, whichever is higher. Treating normal life as 5 years.

If ITC not taken, GST will be paid at transactional value.

[Ganeshan Kalyani]

Do you mean 'Slump sale' ?

[Bhupesh Dand]

Yes sir it is slump sale

[Bhupesh Dand]

Sir,

Would the rate of GST Charged be @18%

Regards,

Bhupesh

[KASTURI SETHI]

'Slump sale' has been discussed in detail in the decision of AAR, Maharashtra which is given below :-

2019 (20) G.S.T.L. 679 (A.A.R. - GST) = 2018 (12) TMI 767 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA IN RE : MERCK LIFE SCIENCE PRIVATE LIMITED

AI Summary

Input Tax Credit reversal on slump sale of capital goods requires repayment or valuation based GST assessment.
GST on a slump sale of capital goods turns on whether Input Tax Credit was availed: where ITC was claimed, the seller must reverse an amount equal to the ITC taken reduced by a prescribed percentage or else compute GST on the transaction value, paying the higher amount; where ITC was not claimed, GST applies to the transaction value.