How does one show itc on capital goods in gstr 3b ?

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Aedel

21 Points Joined November 2011

Hello fellow harrased professionals .

My query is related to ITC on capital goods.

We know that as per GST act , we may only claim 5% credit per quarter ..ie. 20% per year spread out over 5 years.

Now how should our working be shown in 3b ?

1 - Should we add proportionate GST credit every month in 'all other ITC' in 3b...

2 - Should we take all of the credit in first month but not utilize the balance against GST liability. Ie..keep credit in ledger but don't use it to offset liability.

3 - Should we take all of the credit in 'all other ITC' in 3b and then reverse the ineligible amount....Then take proportionate amount every month by reversing the earlier ineligible amount.

I am using one of the options from above but I wanted the advise from experts and elites of this profession.

Replies (2)

Rohit Tibrewal

Student

3193 Points Joined February 2011

Are you providing Taxable as well as exempted supplies?

Pankaj Rawat

GST Practitioner

55067 Points Joined June 2017

If you are providing only Taxable supplies:
No need to reverse any ITC avail on Capital Goods

If You are Providing both Taxable & Exemptes supply :
Yes you have to reverse ITC attributable to exempted supply on monthly basis
formula for the same is...

. Calculate monthly credit - ITC on Capital Goods ÷ 60, say C

2. Calculate ITC attributable to exempt supply

C x Exempt Supply ÷ Total Supply for the month

3. Reverse the same for every month

4. Pay interest as well 😂

Check rule 43(c)