Input credit on capital goods

This query is : Resolved

sanjeev (Querist)
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12 July 2014 Dear Sir / ma'am

I want to ask a query in relation to vat input credit on capital goods.
please tell me the proportion on which credit is allowed and if not allowed in proportion then on what basis it is allowed ?

Regards,

Sanjeev Mittal

Rohan Desai

Rohan Desai (Expert)
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14 July 2014 Please mention the state.

CA Shashank Jain

CA Shashank Jain (Expert)
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18 July 2014 ITC on Capital Goods (not second hand) is also available. Further, it should not be used for manufacture of Exempted Goods (Other than zero rated sales) or for Electrical Power Generation including Captive Use. Further, the capital good on which ITC has been claimed should be used for a continuous period of 5 years, or else proportionate reduction in ITC is required to be made. Besides, ITC is not admissible on capital goods used in the execution of works contract. ITC is available to traders as well as manufacturers.

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