Machine X was sold by Suraj Exports Limited (SEL) on 10th December 2024. Provide a detailed working and explanation of the GST liability incurred by…

(a) The amount payable on the outward supply of capital goods on which ITC has been taken as governed by Section 18(6) read with Rule 40(2) of the CGST Rules, 2017 is as follows: The registered person must pay the higher of two amounts: (A) ITC taken, reduced by 5% per quarter or part thereof, OR (B) Tax on the transaction value. I. Calculation of Amount A (Reduced ITC): This amount represents the original ITC reduced by five percentage points for every quarter or part thereof from the date of the issue of the Invoice. Particulars Calculations Value (₹) Original ITC taken [IGST@18%)] Given 2,70,000 Date of invoice/ Purchase January 25, 2023 Date of Supply/ Sale December 10, 2024 Period of Use (in Quarters) Jan 25 2023 to Dec 10 2024 = 8 quarters (Any part of a quarter is treated as a full quarter) Reduction amount (8 quarters × 5%) 8 × 5% × 2,70,000 1,08,000 Amount A (ITC Remaining) 2,70,000 - 1,08,000 1,62,000 II. Calculation of Amount B (Tax on Transaction Value): This amount is the GST calculated on the transaction value determined under Section 15. Particulars Calculation Value (₹) Transaction Value of Machine X Given 8,00,000 Applicable Tax Rate (IGST) 18% Amount B (Tax Payable) 8,00,000 × 18% 1,44,000 III. Conclusion and Final Liability: Suraj Exports Ltd. (SEL) is required to pay the amount that is the higher of Amount A (₹ 1,62,000) or Amount B (₹ 1,44,000). Final Amount Payable on Machine X:1,62,000. This final amount must be added to the output tax liability of the registered person for the corresponding GST period.