Example 1
Suppose we Purchase a Truck for our factory
Is it Input, Capital good or Input Services?
View answer
It is a Capital goods because it is intended to be used for more than 1 year
We will treat it as Fixed asset in our books
Example 2
Suppose after some months, its tyre gets punctured
We get it replaced by a mechanic with a new tyre
Will you put it in Truck A/c or Repair A/c
Is it Input, Capital good or Input Services?
View answer
It is a repair account
We will treat it as inputs(as goods are purchased)
Example 3
Suppose we do not get tyre replaced
We repair and fix same tyre
Is it Input, Capital good or Input Services?
View answer
It is now Input Service
(as no goods were purchased, just mechanic took its service charges
Example 1
Suppose I am a Taxi Operator
I Purchase a Car for 500000 + GST in January
To reduce running cost of car, I got a CNG Fitted in Car at a cost of 30000+GST in Feb
Is it Input, Capital good or Input Services?
View answer
Both are Capital Goods
Reason
Expenses on Initial Purchase of Fixed asset is Capital Asset
Subsequent expenses which increase efficiency of fixed asset beyond previous level is also capital goods
Example 2
Suppose I am a Taxi Operator
I Purchase a Car for 500000 + GST in January
Later Car met with an accident and 300000+gst was charged on repair of car
Is it Input, Capital good or Input Services?
View answer
Initial Purchase of Car is Capital Goods
Subsequent expenses is Repair A/c so treated as Inputs
It is not capital goods because it does not increase efficiency of car beyond previous level
It only maintains efficiency of car