ITC claim on purchase of capital goods

[V Rajalakshmi]

whether Supplier of ready-to-cook food paying tax @5%on output can avail ITC on capital asset purchase?

[Shilpi Jain]

There is lack of clarity in the query. If the item is sold as goods and tax paid then ITC would be eligible. The ITC restriction is only in case of supply of service

AI Summary

Input tax credit availability on taxed supplies of goods may extend to capital asset purchases when tax is paid. Whether a supplier of ready-to-cook food taxed on supply can claim input tax credit on capital goods: the reply states that if the item is supplied as goods and tax is paid, input tax credit is available; the ITC restriction applies in the case of supply of services.