TaxTMI 
TaxTMI 
Cess to be considered in the time of sale of capital goods
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....ess to be considered in the time of sale of capital goods<br> Query (Issue) Started By: - vaibhav agrawal Dated:- 29-8-2025 Last Reply Date:- 31-8-2025 Goods and Services Tax - GST<br>Got 3 Replies<br>GST<br>A) If an authorised dealer sells a demo car on which input tax credit (including Compensation Cess) was availed, then at the time of sale under Section 18(6), should the credit availed under C....
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....ess be computed as per Rule 44, or should Cess be charged directly on the value of supply? B) Both Rule 40(2) and Rule 44(6) deals with determination of remaining input tax credit at the time of supply of capital goods. In such a case, which rule is applicable? Reply By Rajan Kumar and associates: The Reply: Sale of Capital Asset used less than 5 years, in this case ITC has to be reversed as pe....
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....r Sec. 18(6) of the CGST Act, 2017 read with Rule 44(1)b of the CGST Rules, 2017. Rule 44(6) of the CGST Rules, 2017 also says ITC has to be reversed as per Rule 44(1)b of the CGST Act, 2017. ITC available has to be calculated as per Rule 40(2) of the CGST Rules, 2017. Hence all the above rules are applicable. We have to calculate Ineligible ITC (ITC to be reversed) as per Rule 44(1)b & Rul....
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....e 40(2) of the CGST Act, 2017. Since we may got 2 different figures (ITC to be reversed), we may reverse whichever is beneficial to us. This is my view. Reply By Shilpi Jain: The Reply: Cess is exempt on sale of old and used motor vehicle - Notification 1/2018-Cess Reply By Rajan Kumar and associates: The Reply: No mam... In this case, ITC has been already availed. Hence cess is applicab....
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