A registered business supplies used machinery on which it took input tax credit. The credit after applying the prescribed reduction is ₹1,26,000, and GST on the transaction value is ₹1,35,000. How…

Section 18(6) of the CGST Act, 2017 requires a registered person supplying capital goods on which input tax credit was taken to pay the higher of the credit reduced by the prescribed percentage points (rule 44(6) of the CGST Rules, 2017: five percentage points per quarter) and the tax on the transaction value. Here ₹1,35,000 exceeds ₹1,26,000; the difference of ₹9,000 and the sum of the two have no basis in the section.