ITC ON CAPITAL GOODS AND REVERSAL ON ITS SALE.

Dear reader, Today I have brought to you a very interesting topic under GST. You might be coping with several confusing facts regarding ITC on Capital goods, Furthermore, let's take a short brief.

ITC ON CAPITAL GOODS.

My answer is yes, let's see how GST has briefed to avail ITC on Capital goods. Section 16(3) of the CGST act says ITC can be claimed if the person has not claimed depreciation on the component of capital goods. in other words, a person can either take input on the GST component or claim depreciation on the tax component.

REVERSAL ON SALE OF CAPITAL GOODS.

If the taxable person sells such capital goods in which ITC had been taken, then such person is liable to pay GST of the higher amount from the following. * ITC taken on such capital goods less 5% points per quarter of a year or part thereof from the date of invoice, or * Sale price of capital goods multiplied by GST rate. Where refractory brick, moulds, dies, jigs and fixtures are supplied as scrap, the taxable person may pay tax on the transaction value of such goods determined Example: an assessee has purchased a machine of 1,00,000/- on 05-10-2018 on which 6% CGST and 6% SGST has been paid, ITC claimed on the same component, later on, the assessee has sold the same at the value of 76,000/- on 12-08-2019. let's see how the reversal of ITC is to be worked.