Input tax credit on capital goods

This query is : Resolved

Umesh (Querist)
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05 March 2018 Dear Sir,

What is the Interest/Penalty applicable if wrong utilisation of Input tax credit on Capital Goods ?

Shall we take Input tax credit paid on capital goods in one installment?

if not what are the remedies available for the credit taken in single installment ?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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05 March 2018 As per section 16(5) of GST Law, the input tax credit of goods and / or service attributable to only supplies effected for business purpose can be taken by registered taxable person. The amount of eligible credit would be calculated in a manner to be prescribed in terms of section 16(7) of the GST Law read with GST ITC Rules (yet to be issued). It is important to note that credit on capital goods also would now be permitted on proportionate basis.