ITC REVERSAL ON CAPITAL GOODS

[Guest]

A taxable person has paid tax whilst procuring capital goods and has claimed ITC thereon. It sells out its capital goods by duly charging GST applicable on the sale (and deposits). Is it still liable of ITC reversal. Please explain.

[DR.MARIAPPAN GOVINDARAJAN]

In my view, yes.

[Guest]

thanks for response.

[Shilpi Jain]

Why is reversal of ITC required? If it was used for business and is in respect of taxable supplies no reversal would be required.

[Mr Patel]

Input credit reversal arises when Capital Goods used for Personal Use or for Exempted Sales.

in your case not required to reversal.

[KASTURI SETHI]

When GST has been paid at the time of supply/removal of capital goods at transaction value, no reversal is required.

[YAGAY andSUN]

Levy of double jeopardy or taxation on the same transaction/crime, even is not allowed in our Constitution. The Constitution of India is the supreme law of our country. Therefore, in our view also if GST is paid then reversal is not required on the supply of capital goods.

[Guest]

Thanks for enlightening

[Ganeshan Kalyani]

Yes when tax is paid on outward supply then reversal of input tax credit is not warranted.

AI Summary

Debate on ITC Reversal: Experts Agree No Reversal Needed if GST Paid on Capital Goods Sale A discussion on a forum addressed whether a taxable person must reverse Input Tax Credit (ITC) after selling capital goods and charging the applicable Goods and Services Tax (GST). Several participants, including Dr. Mariappan Govindarajan, Mr. Patel, and Ganeshan Kalyani, agreed that ITC reversal is not necessary if GST is duly paid on the sale of capital goods. Shilpi Jain and KASTURI SETHI argued that reversal is not required if the goods were used for business and taxable supplies. YAGAY and SUN highlighted that double taxation is not permissible under the Indian Constitution.