Just a moment...

Report
FeedbackReport
×

By creating an account you can:

Logo TaxTMI
>
Feedback/Report an Error
Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
+ Post a Query
Post a New Query
Title :
0/200 char
Description :
Max 0 char
Category :
Delete Reply

Are you sure you want to delete your reply beginning with '' ?

Delete Issue

Are you sure you want to delete your Issue titled: '' ?

Discussion Forum

Back

All Issues

Advanced Search
Reset Filters
Search By:
Search by Text :
Press 'Enter' to add multiple search terms
Select Date:
FromTo
Category :
OR
Search by Issue ID:
NOTE: If you have inputs in both the fields, then results will be shown for issueId first.
Issue ID : 116668
- 0 -

ITC on Capital work in progress

Date 27 Aug 2020
Replies1 Answers
Views 12527 Views
Asked By

Dear Sir,

One of our clients is under process of fabricating a machinery and since it is a longer term project, it is held in CWIP as on 31.03.2020. The machinery involved use of imported materials on which IGST was paid at port, however, the client has taken the view that GST ITC on same is not available until capitalisation of asset and therefore GST paid is capitalised as "Deferred GST Input" and shown as a separate asset and neither is GST claimed in GSTR-3B.

Section 2(19) of CGST Act 2017 defines capital goods as:

"(19) “capital goods” means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business;"

However, when asset is capitalised as CWIP in Balance sheet would it not amount to capitalisation and make assessee eligible for Input claim? Or he has to wait till completion of project to claim GST input?

Please provide your expert opinions in light of both section 2 as well as section 16 of CGST Act 2017?

1 answers
Sort by

Old Query - New Comments are closed.

Hide
- 0
Replied on Aug 28, 2020
1.

My views are as under :-

1. No need to wait for completion of the project. Note the words, "intended to be used" mentioned in the definition of 'Capital Goods'. Section 16 of CGST Act also talks of the phrase, "intended to be used."

2. See Rule 43 (5) of CGST Rules, 2017

Q No.3 When asset is capitalised as CWIP in Balance sheet would it not amount to capitalization and make assessee eligible for Input Tax Credit claim on Capital Goods ?

3. Answer : Yes. Books of account are statutory records. You are well aware that Balance Sheet is based on books of account.

Old Query - New Comments are closed.

Hide
Recent Issues