Business fixed assets GST input can take or not
please explain sir
Yes you can take input tax credit.
5 Replies
APURBA CHATTERJEE
(QUALIFIED CHARTERED ACCOUNTANT)
(608 Points)
Replied 24 August 2024
Yes, you can take ITC on Fixed Assets.
RAJA P M
("Do the Right Thing...!!!")
(128101 Points)
Replied 24 August 2024
@ Mr Bhanuprakash,
Without details we can't give proper reply...
So, Please ask with details like goods and Your business activities
Without details we can't give proper reply...
So, Please ask with details like goods and Your business activities
Money Money
(429 Points)
Replied 27 August 2024
Certainly! Let’s delve into the details of GST input tax credit (ITC) related to business fixed assets.
Eligibility for ITC on Fixed Assets:
You can claim ITC on the GST paid for purchasing fixed assets (such as machinery, equipment, furniture, etc.) if they are used for business purposes.
The following conditions must be met:
The fixed asset should be used for making taxable supplies (i.e., goods or services that attract GST).
The GST paid on the purchase of the fixed asset should be reflected in your GST return (GSTR-2A or GSTR-2B).
The asset should not be used exclusively for exempt supplies (supplies that do not attract GST).
You should have proper documentation (invoices, bills, etc.) to support the ITC claim.
Blocked Credits:
Certain situations restrict you from claiming ITC on fixed assets:
If the asset is used for personal purposes or non-business activities.
If the asset falls under the category of blocked credits (e.g., motor vehicles, except for specific cases).
If the asset is used for providing exempt supplies.
Distribution of ITC on Capital Goods:
For capital goods (which include fixed assets), ITC is distributed over multiple years.
You can claim ITC in the year of purchase and distribute it over the useful life of the asset.
The distribution is done based on the formula:ITC per month=Useful life (in months)Total ITC
Remember to maintain proper records
Eligibility for ITC on Fixed Assets:
You can claim ITC on the GST paid for purchasing fixed assets (such as machinery, equipment, furniture, etc.) if they are used for business purposes.
The following conditions must be met:
The fixed asset should be used for making taxable supplies (i.e., goods or services that attract GST).
The GST paid on the purchase of the fixed asset should be reflected in your GST return (GSTR-2A or GSTR-2B).
The asset should not be used exclusively for exempt supplies (supplies that do not attract GST).
You should have proper documentation (invoices, bills, etc.) to support the ITC claim.
Blocked Credits:
Certain situations restrict you from claiming ITC on fixed assets:
If the asset is used for personal purposes or non-business activities.
If the asset falls under the category of blocked credits (e.g., motor vehicles, except for specific cases).
If the asset is used for providing exempt supplies.
Distribution of ITC on Capital Goods:
For capital goods (which include fixed assets), ITC is distributed over multiple years.
You can claim ITC in the year of purchase and distribute it over the useful life of the asset.
The distribution is done based on the formula:ITC per month=Useful life (in months)Total ITC
Remember to maintain proper records
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