TaxTMI 
TaxTMI 
When capital goods on which input tax credit is claimed are sold or stock transferred to other states, the GST payable is required to be worked out based on provisions under Rule 40(2) or Rule 44(6) of CGST Rules, 2017?
Supply of Capital Goods
08 Mar 2023 
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Calculation of GST on supply of capital goods: choose higher of reduced credit method or transaction-value tax to ensure compliance.
Calculation of tax on supply of capital goods with input tax credit requires paying the credit taken reduced by a prescribed time-based percentage or the tax on the transaction value, whichever is higher; an alternative rule cross-references the stock-computation method and treats any excess over transaction-value tax as part of output tax liability, and specified capital items supplied as scrap may be taxed on transaction value. (AI Summary)
Calculation of tax on supply of capital goods with input tax credit requires paying the credit taken reduced by a prescribed time-based percentage or the tax on the transaction value, whichever is higher; an alternative rule cross-references the stock-computation method and treats any excess over transaction-value tax as part of output tax liability, and specified capital items supplied as scrap may be taxed on transaction value. (AI Summary)