Question ID : 44694

Reversal of ITC

How to reverse GST on ITC of fixed assets used over years and now discarded

Answer ID : 85469

If Asset is used for 30 months then 50% of ITC availed should be reversed ITC availed * No of months remaining / 60 60months is taken as the Life of asset here

Answer ID : 85478

I presume, this is a fixed asset on which Input tax credit under GST has been taken. In which case, section 18 (6) of the CGST ACT 2017 will apply, which provides for payment of Gst on transaction value (or) ITC to be revered proportionately if the asset is sold before 5 years from the date of purchase. ITC reversal shall be computed as per Rule 44(6) of CGST Rules 2017, based on the remaining months, with respect to 5 years of life.

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