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Input Tax Credit on Capital Goods

Rafiq Hussain (Finance Professional) (6 Points)

02 February 2019

Sir,
I am working for a Bank. My query is regarding claiming input tax credit on purchase of capital goods. Suppose we have purchased any asset of Rs. 100 + 18 as GST. We claim input tax credit of Rs. 9 as banks are entitled to claim ITC @ 50%. Now please clarify do we have to capitalize this asset on 109 or 100 only?

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4 Replies

CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 02 February 2019

100 capitalised and you are here taking double benefits taking inputs and capitalised and claim dep. on inputs part

so assets should be recorded @ 100

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Sanjiv Rajpoot (3430 Points)
Replied 02 February 2019

if u want take credit then recorded on 100 and if u not take itc then depreciation charge on 109 amount

pritesh (CA Final student) (7101 Points)
Replied 03 February 2019

If You are taking itc then asset value 100 should be recorded in books otherwise 109.

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 03 February 2019

In my view you are liable to claim Depreciation on 109/- as Per Bank if you have opted for 50% itc claim scheme then , Rs. 9 you have to shown as reversal , the book entry can be pass in account of book for the is
capital Asset Dr
to ITC reversal Cr

Hence that Rs. 9 get added to fixed asset

**Open for other Views