ITC REVERSAL ON CAPITAL GOODS

[Asked by 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.

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 and SUN]

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.

Thanks for enlightening

[Ganeshan Kalyani]

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

AI Summary

Input tax credit reversal not required when capital goods are sold as a taxable supply and GST is paid.
When capital goods used in business are sold as a taxable outward supply and GST is charged and paid on that sale, reversal of input tax credit is not required; reversal is required only where capital goods are diverted to personal use or used for exempt supplies.