TaxTMI 
TaxTMI 
My client purchased a machine when he did not have any GST registration. Later on, after obtaining registration, he did not claim its ITC as well. Now he wants to sell the machine. Is he bound to charge tax on sale of machine or is there any exemption in this case?
Taxability of capital goods (machine) when no ITC availed?
10 Dec 2025 
10 Replies 
1581 Views Asked by
Sale of a secondhand machine by a registered person attracts GST on the sale consideration even if ITC was never claimed.
Sale of a machine by a registered person is a taxable outward supply and attracts GST on the sale consideration; lack of registration at acquisition or non claiming of ITC does not exempt the sale. The ITC reversal rule applies only where ITC was availed on capital goods and is not triggered if no ITC was taken. Disposals without consideration and particular factual contexts (scrap, secondhand trading, related party transfers) may alter applicability, but the basic obligation is output tax on transaction value. (AI Summary)
Sale of a machine by a registered person is a taxable outward supply and attracts GST on the sale consideration; lack of registration at acquisition or non claiming of ITC does not exempt the sale. The ITC reversal rule applies only where ITC was availed on capital goods and is not triggered if no ITC was taken. Disposals without consideration and particular factual contexts (scrap, secondhand trading, related party transfers) may alter applicability, but the basic obligation is output tax on transaction value. (AI Summary)