capital goods destroyed in fire

[Kaustubh Karandikar]

In case of capital goods destroyed in fire on which ITC is claimed, the ITC to be reversed on it whether will be on

1) entire ITC originally claimed or

2) as per the formula prescribed under Rule 44(6) of CGST Rules 2017?

AI Summary

Debate on Reversal of Input Tax Credit for Fire-Damaged Capital Goods under GST: Rule 44(6) vs. Rule 40(2) A discussion on a forum addresses the reversal of Input Tax Credit (ITC) for capital goods destroyed by fire under GST regulations. Participants debate whether to reverse ITC based on the entire originally claimed amount or using Rule 44(6) of the CGST Rules 2017. Some argue there is a gap in the law for used capital goods not yet fully depreciated. Others suggest using Rule 40(2) as a guideline to avoid litigation, though this is not definitive. The discussion highlights differing interpretations and potential litigation risks due to the lack of specific provisions for such scenarios.