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Sec 18(6) — when capital goods on which ITC has been availed are SUPPLIED (sold) — the amount payable is the HIGHER of:
AITC originally taken, reduced by such percentage points as may be prescribed (5% per quarter), OR tax on transaction value
BOriginal ITC amount only
CTransaction value × current rate
D10% of cost
Answer & Solution
Correct answer: A. ITC originally taken, reduced by such percentage points as may be prescribed (5% per quarter), OR tax on transaction value
1. Sec 18(6) read with Rule 44(6) — when capital goods on which ITC has been availed are subsequently supplied, the registered person must pay the HIGHER of:
2. (a) ITC originally availed, reduced by 5 percentage points per quarter (or part) from date of invoice, OR
3. (b) Tax on the transaction value of the capital goods.
_Source: ICAI BoS CA Final Paper 8, Ch 6 "Input Tax Credit", §Sec 18(6) + Rule 44_
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