(1) Subject to the provisions of sub-section (3) of section 16, the input tax credit in respect of capital goods, which attract the provisions of sub-sections (1) and (2) of section 17, being partly used for the purposes of business and partly for other purposes,or partly used for effecting taxable supplies including zero rated supplies andpartly for effecting exempt supplies, shall be attributed to the purposes of business or for effecting taxable supplies in the following manner, namely,-
(a) the amountof input tax in respect of capital goods used or intended to be used exclusively for non-business purposes or used or intended to be used exclusively for effecting exempt supplies shall be indicated in FORM GSTR-2 and shall not be credited to his electronic credit ledger;
(b) the amountof input tax in respect of capital goods used or intended to be used exclusively for effecting supplies other than exempted supplies but including zero-rated supplies shall be indicated in FORM GSTR-2 and shall be credited to the electronic credit ledger;
(c) the amountofinput tax in respect of capital goods not covered under clauses (a) and
(b), denoted as ‘A’, shall be credited to the electronic credit ledger and the useful life of such goods shall be taken as five years from the date of the invoice for such goods:
Provided that where any capital goodsearlier covered under clause (a) is subsequently covered under this clause, the value of ‘A’ shall be arrived at by reducing the input tax at the rate of five percentage points for every quarter or part thereof and the amount‘A’ shall becredited to the electronic credit ledger;
Explanation.- Anitem ofcapital goods declared under clause (a) onits receipt Shall not attract the provisions of sub-section (4) of section 18, if it is subsequently covered underthis clause.
(d) the aggregate of the amounts of ‘A’ credited to theelectronic credit ledger under clause (c), to be denoted as ‘T,’, shall be the commoncredit in respect of capital goods for a tax period:
634 (13) 634 (14) "ayaa catia, fetia 30 at 2017 ge ¥
Provided: that where any capital goods earlier covered under clause (b) is subsequently covered underclause (c), the value of ‘A’ arrived at by reducing the input tax at the rate of five percentage points for every quarter or part thereof shall be addec to the aggregate value ‘T,’; ,
(e) the amount ofinputtax credit attributable to a tax period on commoncapital goods during their useful life, be denoted as ‘T,,’ and calculated as- T= T.+60
(f) the amount of input tax credit, at the beginning of a tax period, on all common capital goods whose useful life remains during the tax period, be denoted as ‘T,’ and shall be the aggregate of ‘T,,’ for all such capital goods;
(g) the amount of commoncredit attributable towards exempted supplies, be denoted as ‘T,’, and calculated as- T= (E+ F)x T, where, ‘E’ is the aggregate value ofexempt supplies, made, during the tax period, and ‘F’ is the total turnoverofthe registered person during the tax period:
Provided that where the registered person does not have any turnover during the said tax period or the aforesaid information is not available, the value of ‘E/F’ shall be calculated by taking values of ‘E’ and‘F’ of the last tax period for which the details of such turnover are available, previous to the month during which the said value of ‘E/F’is to be calculated;
Explanation.- For the purposesofthis clause, it is hereby clarified that the aggregate value of exempt supplies and the total turnover shall exclude the amount of any duty or tax levied under entry 84 of List I of the Seventh Schedule to the Constitution and entry 51 and 54 of List II of the said Schedule;
(h) the amount T, along with the applicable interest shall, during every tax period of the useful life of the concerned capital goods, be added to the output tax liability oftheperson making such claim ofcredit.
(2) The amount T, shall be computed separately for central tax, State tax, Unionterritory tax and integratedtax. - 44, Mannerof reversal of credit under special circumstances.- (1) The amount of input tax credit relating to inputs held in stock, inputs contained in semi-finished and finished goodsheld in stock, and capital goods held in stock shall, for the purposes of sub-section (4) of section 18 or sub-section (5) of section 29, be determined in the following manner, namely,-
(a) for inputs held in stock and inputs contained in semi-finished and finished goods held in stock, the input tax credit shall be calculated proportionately on the basis of the corresponding invoices on which credit had been availed by the registered taxable person on such inputs;
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(b) for capital goods held in stock, the input tax credit involved in the remaining useful life in months shall be computed onpro-rata basis, taking the usefullife as five years.
Illustration Capital goods have been in usefor 4 years, 6 month and 15 days.
The useful remaininglife in months= 5 months ignoring apartofthe month Input tax credit taken on such capital goods= C .
Inputtax credit attributable to remaining useful life= C multiplied by 5/60
(2).The amount, as specified in sub-rule (1) shall be determinedseparately for input tax credit of integrated tax and central tax.
(3) Where the tax invoices related to the inputs held in stock are not available, the registered person shall estimate the amount under sub-rule (1) based on the prevailing market price of the goods onthe effective date ofthe occurrence of any of the events specified in sub-section
(4) of section 18 or, as the case may be, sub-section (5) of section 29. ,
(4) The amount determined under sub-rule (1) shall form part ofthe output tax liability ofthe registered person and the details of the amount shall be furnished in FORM GST ITC-03, where such amountrelates to any event specified in sub-section (4) ofsection 18 and in FORM GSTR-10, where such amountrelates to the cancellation ofregistration.
(5) The details furnished in accordance with sub-rule (3) shall be duly certified by a practicing chartered accountant or cost accountant.
(6) The amountofinputtax credit for the purposes of sub-section (6) of section 18 relating to capital goodsshall be determined in the same manneras specified in clause (b) ofsub-rule (1) and the amountshall be determined separately for input tax credit of IGST and CGST:
_ Provided that where the amount sodetermined is more than the tax determined onthe _ transaction value ofthe capital goods, the amount determined shall form part ofthe output tax liability and the sameshall be furnished in FORM GSTR-1.
45, Conditions and restrictions in respect of inputs and capital goods sent to the job worker.- (1) The inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challanissued by the principal, including where such goods are sent directly to a job-worker. .
(2) The challan issued by the principal to the job worker shall contain the details specified in rule 55. .
(3) The details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from one job worker to another during a quarter shall be included in FORM GST ITC-04 furnishedfor that period on or before the twenty-fifth day ofthe month succeeding the said quarter.
(4) Where the inputs or capital goods are not returned to the principal within the time stipulated in section 143, it shall be deemed that such inputs or capital goods had been supplied by the principal to the job worker on the day whenthe said inputs or capital goods 634 (16) Fee Usa, fear 30 FA 2017 were sent out and the said supply shall be declared in FORM GSTR-1 andtheprincipal shall be liable to pay the tax along with applicable interest. .
Explanation.- For the purposes ofthis Chapter,-
(1) the expressions “capital goods” shall include “plant and machinery”asdefined in the Explanation to section 17;
(2) for determining the value of an exempt supply as referred to in sub-section (3) of section 17-
(a) the value of land and building shall be taken as the same as adopted for the purpose ofpaying stamp duty; and
(b) the value of security shall be taken as one per cent. of the sale value of such security.
Chapter VI TAX INVOICE, CREDIT AND DEBIT NOTES