GST, a paradigm shift from origin based tax to destination based tax, has been introduced in India with one of the objectives to provide an uninterrupted and seamless flow of input tax credit, and a mechanism to avoid cascading of taxes. Thus, to ensure this smooth flow of credit and also authencity of credit claimed by the tax payers, in some cases they are required to make declarations in Form GST ITC-01, Form GST ITC-02 etc. Government has given the responsibility of certifying aforesaid declarations to Chartered Accountants and Cost Accountants

1) Certificate under Section 18(1)(a) of the CGST Act:

In terms of Section 18(1) (a) of the CGST and SGST Acts, a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take Input Tax Credit in respect of inputs held in stock and inputs contained in semi- finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the SGST / CGST Acts, 2017 by declaring the same, electronically, on the common portal in Form GST ITC-01 (Hereinafter referred to as the Statement) The details furnished in the above statement shall be duly certified by a practicing chartered accountant or a cost accountant where the aggregate claim exceeds Rs. 2 Lakhs.

2) Certificate under Section 18(1)(b) of the CGST Act

In terms of Section 18(1) (b) of the CGST and SGST Acts, 2017, a tax payer who takes registration under sub-section (3) of section 25 of the CGST Act and SGST Act, is eligible to avail Input Tax Credit in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration by declaring the same, electronically, on the common portal in Form GST ITC-01 (hereinafter referred to as the “Statement”) The details furnished in the above statement shall be duly certified by a practicing chartered accountant or a cost accountant where the aggregate claim exceeds Rs. 2 Lakhs.

3) Certificate under Section 18(1)(c) of the CGST Act

In terms of Section 18(1) (c) of the CGST and SGST Acts any registered person ceases to pay tax under section 10, he is eligible to avail Input Tax Credit in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods (as reduced by the prescribed percentage points) on the day immediately preceding the date from which he becomes liable to pay tax u/s 9 of the CGST / SGST Acts, 2017, by declaring the same, electronically, on the common portal in Form GST ITC-01(hereinafter referred to as the “Statement”). The details furnished in the above statement shall be duly certified by a practicing chartered accountant or a cost accountant where the aggregate claim exceeds Rs. 2 Lakhs.

4) Certificate under Section 18(1)(d) of the CGST Act

In terms of Section 18(1)(d) of the CGST and SGST Acts, where an exempt supply by a registered person becomes taxable supply, the registered person is eligible to avail Input Tax Credit in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock relatable to such exempt supplies and on capital goods (as reduced by the prescribed percentage points) exclusively used for such exempt supplies on the day immediately preceding the date on which such exempt supplies become taxable supplies under the CGST / SGST Acts, 2017 i.e by declaring the same, electronically, on the common portal in Form GST ITC-01 (hereinafter referred to as the “Statement”) The details furnished in the above statement shall be duly certified by a practicing chartered accountant or a cost accountant where the aggregate claim exceeds Rs. 2 Lakhs.

5) Certificate under Section 18(3) of the CGST Act

In terms of Section 18(3) of the CGST and SGST Acts, where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains un-utilized in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in the manner prescribed in the CGST / SGST Rules, 2017 by declaring the same, electronically, on the common portal in Form GST ITC-02.

Rule 41(2) of the CGST Rules provides that the transferor shall also submit a copy of a certificate issued by a practicing chartered accountant or cost accountant certifying that the sale, merger, de-merger, amalgamation, lease or transfer of business has been done with a specific provision for the transfer of liabilities

6) Certificate under Section 54 of the CGST Act

Where the Applicant has filed an application for refund u/s 54 of the CGST / SGST Act, 2017 under the following scenario:

  • refund of tax paid on zero-rated supplies export of goods or services or both or on inputs or input services used in making such zero-rated supplies exports;
  • refund of unutilised input tax credit under sub-section (3);
  • refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued;
  • refund of tax in pursuance of section 77;
  • the tax and interest, if any, or any other amount is paid by the applicant and he has not passed on the incidence of such tax and interest to any other person;

(A chartered accountant or a cost accountant is required to certify that the incidence of tax, interest or any other amount claimed as refund, in the application for refund (herein referred to as `Statement’) has not been passed on to any other person, in a case where the amount of refund claimed exceeds two lakh rupees )

7) Certificate under Section 29(5) of the CGST Act

In terms of Section 29(5) of the CGST and SGST Acts, every registered person whose registration is cancelled shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or capital goods or plant and machinery (as reduced by the prescribed percentage points) on the day immediately preceding the date of such cancellation or the output tax payable on such goods, whichever is higher under the CGST / SGST Acts, 2017 i.e. by declaring the same, electronically, on the common portal in Form GSTR-10.

As per Rule 44(3) of the CGST Rules, where the tax invoices related to the inputs held in stock are not available, the registered person shall estimate the amount mentioned in above, based on the prevailing market price of the goods on the effective date of the occurrence of the event specified in section 29(5) of the CGST Act and SGST Acts.

The details so furnished in the above statement shall be duly certified by a practicing chartered accountant or a cost accountant.

8) Certificate under Section 18(4) of the CGST Act- Composite Tax Payer

In terms of Section 18(4) of the CGST and SGST Acts, the Applicant who has availed input tax credit opts to pay tax under Section 10 of the CGST and SGST Acts, shall be liable to pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of exercising the option to pay tax u/s 9 of the CGST / SGST Acts, 2017, by declaring the same, electronically, on the common portal in Form GST ITC-03.

As per Rule 44(3) of the CGST Rules, where the tax invoices related to the inputs held in stock are not available, the registered person shall estimate the amount mentioned above, based on the prevailing market price of the goods on the effective date of the occurrence of any of the events specified in section 18(4) of the CGST Act and SGST Acts. The details so furnished in the above statement shall be duly certified by a practicing chartered accountant or a cost accountant.

9) Certificate under Section 18(4) of the CGST Act-Taxable supplies by registered person become wholly exempt

In terms of Section 18(4) of the CGST and SGST Acts, where a taxable supply by a registered person becomes exempt supply the Applicant who has availed input tax credit, shall be liable to pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods (as reduced by the prescribed percentage points) used for such taxable supplies on the day immediately preceding the date on which such taxable supplies become exempt supplies under the CGST / SGST Acts, 2017 by declaring the same, electronically, on the common portal in Form GST ITC-03.

As per Rule 44(3) of the CGST Rules, where the tax invoices related to the inputs held in stock are not available, the registered person shall estimate the amount mentioned above, based on the prevailing market price of the goods on the effective date of the occurrence of any of the events specified in section 18(4) of the CGST Act and SGST Acts. The details so furnished in the above statement shall be duly certified by a practicing chartered accountant or a cost accountant.

Also Read –ICAI Guide to CA Certificates in GST

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2 Comments

  1. Tawheed Rasool says:

    With regards

    Please it clear my doubt can i claim ITC u/s 18(3) through ITC for 02 without C.A certificate if ITC is less than 2 Lakh

    Thanks

  2. Sanjeev says:

    An excellent article!

    Request you provide clarification w.r.t Section 18(4) pertaining to reversal of credit in (two) special circumstances given in this article (switching to composition levy or taxable supply becoming exempt).
    While filing ITC-03, for reversal of credit already claimed and utilized, will the taxpayer pay interest? If yes, at what rate of interest?

    Thanks!

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