CGST Rule 43 — Manner of determination of input tax credit in respect of capital goods and reversal thereof
Official sources
Finin2min Summary - Rule in 2 Minutes
The parallel rule to Rule 42, but for capital goods used partly for exempt supplies/non-business purposes — ITC is reversed over the capital good's deemed 5-year useful life, in proportion to exempt-supply turnover each tax period.
official statutory reference
Paragraph-wise decode
ITC on a capital good used commonly for taxable and exempt supplies is credited to the electronic credit ledger and treated as attributable to a useful life of 5 years; the common credit for each tax period is 1/60th of that amount, further apportioned to exempt supplies in the ratio of exempt to total turnover for that period.
Section-Rule-Form-Notification bridge
Practical example
A machine used for both taxable production and an exempt activity has 1/60th of its ITC allocated to each tax period, with the exempt-turnover share of that monthly amount reversed.
Practical Q&A
- What does rule 43 regulate?
- It regulates rule 43 - Manner of determination of input tax credit in respect of capital goods and reversal thereof. Read the exact text, conditions, exceptions and transaction date together.
- Which subordinate law should be checked?
- No CGST Rule corresponds directly to this provision. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.
- What evidence should be retained?
- Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.
- Can portal behaviour override the statute?
- No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.
Professional rule note
Why Rule 43 matters
Manner of determination of input tax credit in respect of capital goods and reversal thereof should be read with its enabling CGST Act provision, prescribed forms, amendment notification, transaction date and the live portal workflow. The operative-text block on this page remains the legal core; the application controls add practical steps without altering it.
Rule → Form → evidence bridge
Practical cases
ITC claim
Reconcile invoice/legal eligibility with GSTR-2B/IMS and books; portal visibility alone is not legal entitlement.
Reversal/re-availment
Document trigger date, calculation, ledger treatment and conditions for re-availment.
Shared/common credit
Use a reproducible allocation working with evidence retained for audit and notice response.
Finin2min Q&A
- What does CGST Rule 43 deal with?
- Manner of determination of input tax credit in respect of capital goods and reversal thereof. Start with the operative Rule version and then test the connected Act provision, forms and amendments.
- Which GST form is connected to Rule 43?
- GSTR-3B The Rule and live portal workflow control.
- Can I rely only on the GST portal?
- No. Portal functionality is execution infrastructure; legal eligibility and consequences come from the Act, Rules and valid instruments.
- What should I keep on file?
- The official Rule version used, amendment/effective-date evidence, underlying transaction records, computation, portal submission and resulting acknowledgement/order.