Input tax credit of tax not allowed if depreciation claimed on tax component :
Where the registered taxable person has claimed depreciation on the tax component of the cost of capital goods under the provisions of the Income Tax Act, 1961, the input tax credit on the said tax component shall not be allowed – section 16(3) of CGST Act.
Thus, if net value of capital goods is Rs 100 lakhs and GST paid is Rs 18 lakhs, the taxable person should claim depreciation in income tax only on Rs 100 lakhs.