Transitional arrangements for input tax credit - Section 18
18.
(1) A registered person, other than a person opting to pay
tax under section 10 of the Central Goods and Services Tax Act, shall be
entitled to take, in his electronic credit ledger, credit of the amount of
Value Added Tax and Entry Tax, if any, carried forward in the return relating
to the period ending with the day immediately preceding the appointed day,
furnished by him under the existing law, not later than ninety days after the
said day, in such manner as may be prescribed:
Provided that the registered person shall not be allowed to
take credit in the following circumstances, namely:—
(i) where the said amount of credit is not admissible as
input tax credit under this Act; or
(ii) where he has not furnished all the returns required
under the existing law for the period of six months immediately preceding the
appointed day; or
(iii) where the said amount of credit relates to goods sold
under such exemption notifications as are notified by the Government:
Provided
further that so much of the said credit as is attributable to any claim related
to section 3, sub-section (3) of section 5, section 6 or section 6A or
sub-section (8) of section 8 of the Central Sales Tax Act, 1956 that is not
substantiated in the manner, and within the period, prescribed in rule 12 of
the Central Sales Tax (Registration and Turnover) Rules, 1957 shall not be
eligible to be credited to the electronic credit ledger:
Provided also that an
amount equivalent to the credit specified in the second proviso shall be
refunded under the existing law when the said claims are substantiated in the
manner prescribed in rule 12 of the Central Sales Tax (Registration and
Turnover) Rules, 1957.
(2) A registered person, other than a person opting to pay
tax under section 10 of the Central Goods and Services Tax Act, shall be
entitled to take, in his electronic credit ledger, credit of the unavailed
input tax credit in respect of capital goods, not carried forward in a return,
furnished under the existing law by him, for the period ending with the day
immediately preceding the appointed day in such manner as may be prescribed:
Provided that the registered person shall not be allowed to
take credit unless the said credit was admissible as input tax credit under the
existing law and is also admissible as input tax credit under this Act.
Explanation.—For the purposes of this section, the
expression ‘‘unavailed input tax credit’’ means the amount that remains after
subtracting the amount of input tax credit already availed in respect of
capital goods by the taxable person under the existing law from the aggregate
amount of input tax credit to which the said person was entitled in respect of
the said capital goods under the existing law.
(3) A registered person, who was not liable to be registered
under the existing law or who was engaged in the sale of exempted goods or tax
free goods or goods which have suffered tax at first point of their sale in the
Union territory and the subsequent sales of which are not subject to tax in the
Union territory under the existing law but which are liable to tax under this
Act or where the person was entitled to the credit of input tax at the time of
sale of goods, shall be entitled to take, in his electronic credit ledger,
credit of the value added tax and entry tax, if any, in respect of inputs held
in stock and inputs contained in semi-finished or finished goods held in stock
on the appointed day subject to the following conditions, namely:—
(i) such inputs or goods are used or intended to be used for
making taxable supplies under this Act;
(ii) the said registered person is eligible for input tax
credit on such inputs under this Act;
(iii) the said registered person is in possession of invoice
or other prescribed documents evidencing payment of tax under the existing law
in respect of such inputs; and
(iv) such invoices or other prescribed documents were issued
not earlier than twelve months immediately preceding the appointed day:
Provided that where a registered person, other than a
manufacturer or a supplier of services, is not in possession of an invoice or
any other documents evidencing payment of tax in respect of inputs, then, such
registered person shall, subject to such conditions, limitations and safeguards
as may be prescribed, including that the said taxable person shall pass on the
benefit of such credit by way of reduced prices to the recipient, be allowed to
take credit at such rate and in such manner as may be prescribed.
(4) A registered person, who was engaged in the sale of
taxable goods as well as exempted goods or tax free goods under the existing
law but which are liable to tax under this Act, shall be entitled to take, in
his electronic credit ledger,—
(a) the amount of credit of the value added tax and entry
tax, if any, carried forward in a return furnished under the existing law by
him in accordance with the provisions of sub-section (1); and
(b) the amount of credit of the value added tax and entry
tax, if any, in respect of inputs held in stock and inputs contained in
semi-finished or finished goods held in stock on the appointed day, relating to
such exempted goods or tax free goods in accordance with the provisions of
sub-section (3).
(5) A registered person shall be entitled to take, in his
electronic credit ledger, credit of value added tax and entry tax, if any, in
respect of inputs received on or after the appointed day but the tax in respect
of which has been paid by the supplier under the existing law, subject to the
condition that the invoice or any other tax paying document of the same was
recorded in the books of account of such person within a period of thirty days
from the appointed day: Provided that the period of thirty days may, on
sufficient cause being shown, be extended by the Commissioner for a further
period not exceeding thirty days: Provided further that the said registered
person shall furnish a statement, in such manner as may be prescribed, in
respect of credit that has been taken under this sub-section.
(6) A registered person, who was either paying tax at a
fixed rate or paying a fixed amount in lieu of the tax payable under the
existing law shall be entitled to take, in his electronic credit ledger, credit
of value added tax in respect of inputs held in stock and inputs contained in
semi-finished or finished goods held in stock on the appointed day subject to
the following conditions, namely:—
(i) such inputs or goods are used or intended to be used for
making taxable supplies under this Act;
(ii) the said registered person is not paying tax under
section 10 of the Central Goods and Services Tax Act;
(iii) the said registered person is eligible for input tax
credit on such inputs under this Act;
(iv) the said registered person is in possession of invoice
or other prescribed documents evidencing payment of tax under the existing law
in respect of inputs; and
(v) such invoices or other prescribed documents were issued
not earlier than twelve months immediately preceding the appointed day.
(7) The amount of credit under sub-sections (3), (4) and (6)
shall be calculated in such manner as may be prescribed.