Input Reversal on Capital Goods

[AdvMurari Kumar]

HI,

We have taken GST Input earlier on Capital Goods at the time of capitalization. Now as on 31st March 22 we discarded the same as the WDV was zero because the life was three years. as per GST rule the life of Capital goods was 5 Year. so it compelled to reverse rest input, after Input utilizing 5% per qtr for three years. is there any way to save that input.

AI Summary

Input tax reversal on capital goods requires proportionate reversal when GST useful life exceeds actual use or upon disposal.
Input tax credit on capital goods claimed on acquisition must be proportionately reversed when the GST-prescribed useful life exceeds actual use or where the asset is disposed of within that statutory period. Retaining the asset for the full GST useful life prevents reversal. If disposal amounts to a supply (including deemed supply under Schedule I), the special reversal provision applies and the ineligible credit attributable to the unexpired statutory life is added to output tax. The tax can be discharged via periodic return (GSTR-3B) or deposit form (DRC-03) and reported in the annual return (GSTR-9).