On Sale of Capital Goods
On Sale of Capital Goods,we have to pay tax on Transaction Value(Sales Price)
However if asset is sold within 60 months,then we have to Calcuate Input Reversal (Credit- 1/60 per Qtr)
We have to pay GST which ever is higher of the two
Summary
SALE OF CAPITAL GOODS
| AFTER 60 MONTHS | BEFORE 60 MONTHS |
| GST AS PER SALES PRICE | GST AS PER SALES PRICE |
| OR | |
| GST Taken-1/60 Per Month Used | |
| Which Ever Is Higher |
Q1 - Suppose Machine Purchased on 19 July 2017 as follows
| PARTICULARS | AMT |
| MACHINE | 100000 |
| CGST | 9000 |
| SGST | 9000 |
| TOTAL | 118000 |
IT IS SOLD ON 23 OCT 2017 FOR 60000
View answer
It is sold within 60 months
GST WILL BE CALCUTED AS FOLLOWS
GST AS PER SALES PRICE
OR
GST Credit Taken-1/60 Per Month Used
Which Ever Is Higher
STEP 1 - CALCULATING GST AS PER SALES PRICE
| PARTICULARS | AMT |
| MACHINE SALES PRICE | 60000 |
| CGST | 5400 |
| SGST | 5400 |
| TOTAL | 70800 |
STEP 2 - Calculating GST Credit Taken-1/60 Per Month Used
In this case,it is used for 3 months 4 days
This will be counted as 4 months
So We will Reverse Input for 56 Months
| PARTICULARS | CGST | SGST | TOTAL |
| GST CREDIT TAKEN | 9000 | 9000 | |
| PERIOD NOT USED | 56 | 56 | |
| CREDIT FOR PERIOD NOT USED | 8400 | 8400 |
STEP 3
CALCULATING HIGHER
| PARTICULARS | CGST | SGST | TOTAL |
| GST AS PER SALES PRICE | 5400 | 5400 | 10800 |
| OR | |||
| GST Credit Taken-1/60 Per Month Used | 8400 | 8400 | 16800 |
| Which Ever Is Higher | 8400 | 8400 | 16800 |
Q2 - Suppose Machine Purchased on 19 July 2017 as follows
| PARTICULARS | AMT |
| MACHINE | 100000 |
| CGST | 9000 |
| SGST | 9000 |
| TOTAL | 118000 |
IT IS SOLD ON 23 OCT 2022 FOR 60000
View answer
IN THIS CASE,MACHINE IS SOLD AFTER 60 MONTHS
SO WE WILL TAKE ONLY TRANSACTION VALUE
| PARTICULARS | AMT |
| MACHINE SALES PRICE | 60000 |
| CGST | 5400 |
| SGST | 5400 |
| TOTAL | 70800 |