Allowable Credit of Central Duties in respect of stock as on 01.07.17 as per Section 140(3) .

Following person are entitled to take credit

1. Not liable to register under earlier law

2. Was engaged in manufacturing exempted goods or providing exempted services

3. Availed the benefit of 26/2012

4. FSD/SSD/Registered Importer

Condition for taking credit

1. Input i.e. Stock to be used taxable supply in CGST

2. Taxpayer is eligible for ITC in CGST

3. Possession of invoice evidencing payment of duties.

4. Invoice should not issue earlier than 12 months i.e. 01.07.16.

5. Supplier of services is not eligible for any abatement under CGST.

** If trader has no invoice as stated in point 3 then credit shall be allowed at the rate of 40% of the central tax i.e. CGST applicable after the appointed date i.e. 01.07.17 subject to following conditions

1. Such goods should not wholly exempt from excise duty.

2. Taxpayer has invoice in respect of procurement of goods.

Credit of the following duties will be allowed

1. Excise Duty as per schedule I & II of CETA, 1985.

2. Countervailing duty as per Custom Act i.e. under section 3(1) or 3(5) of CTA, 1975.

3. AED as per AED (Textile & Textile Articles) Act, 1978.

4. AED as per AED (Goods of special Importance) Act, 1957.

5. National Calamity Contingent Duty as per Finance Act, 2001.

Other Important points

1. Benefit not available in respect of input services.

2. It is must be noted that credit can be availed as CGST credit not SGST credit.

3. This Credit is in addition to normal Cenvat Credit in respect of duties allowed under section 140(1).

Authored by CA Rishi Goyal, Practicing Chartered Accountant in Delhi. For any professional assistance, he can be reached at carishi.rg@gmail.com.

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Tags : goods and services tax (2758) GST (2344)

6 responses to “Credit of central duties on stock as on 01.07.17 in GST Regime”

  1. mgoyal says:

    Sir,

    40% Credit of CGST is allowed when there is no invoice or invoice is available but duty part is not specified.

    • carishi says:

      For any query kindly mail on my mail id because it is not possible to me that i will reply each and every comment on post.

  2. Som Sachdeva says:

    Please clarify:
    All purchases of closing stock are Interstate of Iron & Steel Excise paid @ 12.5% plus 2% CST. So ITC on closing stock is admissible against excise paid invoices @ 12.5%.

    All Sales after 1st July, 2017 shall be @ 12% rates, both Interstate @ 12% IGST and also Intrastate may be chargeable to 6% CGST and 6% SGST, after value addition.

    Question is against which tax, credit of ITC of IGST shall be admissible i.e. IGST, CGST or SGST. We have been given to understand that ITC of closing stock can be adjusted against CGST only.

    • carishi says:

      For any query kindly mail on my mail id because it is not possible to me that i will reply each and every comment on post.

  3. ca udaya dalmia says:

    this provision has been amended. please go through the new one.

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