There are various cases under GST where input tax credit can be availed, few among them are treated as special cases where input tax credit can be availed under GST.

The essence of this write- up is to decipher the manner in which the Input tax credit can be availed in special circumstances.

Contents of this write- up

1. Special cases where Input Tax Credit can be claimed, and

2. Manner of claiming Input Tax Credit in special circumstances

The input tax credit must be availed and credited in the electronic credit ledger. Following are the special cases, where Input Tax Credit can be claimed and also the manner in which the credit must be claimed:

Special Cases Manner of claiming Input Tax Credit
Applied for registration within 30 days he becomes liable [section 18(1)] Declaration in FORM GST ITC-01

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 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock, shall make a declaration, electronically, on the Common Portal in FORM GST ITC-01 to the effect that he is eligible to avail of input tax credit.

A registered person shall not be entitled to take input tax credit in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply.
Voluntary Registration [section 18(1)(b)]

 

Declaration in FORM GST ITC-01

A person who takes registration under sub-section (3) of section 25 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock, shall make a declaration, electronically, on the Common Portal in FORM GST ITC-01 to the effect that he is eligible to avail of input tax credit.

Another declaration

The declaration shall clearly specify the details relating to the inputs held in stock or inputs contained in semi-finished or finished goods held in stock, or as the case may be, capital goods–

(i) on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of the Act, in the case of a claim under clause (a) of subsection (1) of section 18,

(ii) on the day immediately preceding the date of grant of registration, in the case of a claim under voluntary registration,

(iii) on the day immediately preceding the date from which he becomes liable to pay tax under section 9, in the case of a claim under Composition levy,

(iv) on the day immediately preceding the date from which supplies made by the registered person becomes taxable, in the case of a claim under exempted supply of goods or services.

Certification

The details furnished above, shall be duly certified by a practicing chartered accountant or a cost accountant if the aggregate value of claim on account of central tax, State tax, Union territory tax and integrated tax exceeds two lakh rupees.

A registered person shall not be entitled to take input tax credit in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply.
Composite Dealer [section 18(1)(c)]

 

Declaration in FORM GST ITC-01

where any registered person ceases to pay tax under section 10, he shall be entitled to take 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, shall make a declaration, electronically, on the Common Portal in FORM GST ITC-01 to the effect that he is eligible to avail of input tax credit.

Calculation In case of capital goods

The registered person shall claim the credit on capital goods after reducing the tax paid on such capital goods by five percentage points per quarter of a year or part thereof from the date of invoice or such other documents on which the capital goods were received by the taxable person.

Verification with the corresponding details

The input tax credit claimed in accordance with the provisions of composition levy, shall be verified with the corresponding details furnished by the corresponding supplier in FORM GSTR-1 or as the case may be, in FORM GSTR- 4, on the Common Portal.

A registered person shall not be entitled to take input tax credit in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply
Exempted supply of goods or services or both [section 18(1)(d)]

 

 

Declaration in FORM GST ITC-01

where an exempt supply of goods or services or both by a registered person becomes a taxable supply, such person shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock relatable to such exempt supply and on capital goods exclusively used for such exempt supply, shall make a declaration, electronically, on the Common Portal in FORM GST ITC-01 to the effect that he is eligible to avail of input tax credit.

 

Calculation In case of capital goods

The registered person shall claim the credit on capital goods after reducing the tax paid on such capital goods by five percentage points per quarter of a year or part thereof from the date of invoice or such other documents on which the capital goods were received by the taxable person.

Verification with the corresponding details

The input tax credit claimed in accordance with the provisions of exempted supply of goods or services or both, shall be verified with the corresponding details furnished by the corresponding supplier in FORM GSTR-1 or as the case may be, in FORM GSTR- 4, on the Common Portal.

 

A registered person shall not be entitled to take input tax credit in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply
Change in constitution of registered person [section 18(3)] Furnishing of details in FORM GST ITC- 02 for transfer of credit

A registered person shall, furnish the details of sale, merger, de-merger, amalgamation, lease or transfer of business, in FORM GST ITC-02, electronically on the Common Portal along with a request for transfer of unutilized input tax credit lying in his electronic credit ledger to the transferee.

 

Provided that in the case of demerger, the input tax credit shall be apportioned in the ratio of the value of assets of the new units as specified in the demerger scheme.

Submission of copy of certificate by Transferor

The transferor shall also submit a copy of a certificate issued by a practicing chartered account or cost accountant certifying that the sale, merger, de-merger, amalgamation, lease or transfer of business has been done with a specific provision for transfer of liabilities.

Acceptance by transferee & un- utilized credit is credited

The transferee shall, on the Common Portal, accept the details so furnished by the transferor and, upon such acceptance, the un-utilized credit specified in FORM GST ITC-02 shall be credited to his electronic credit ledger.

The inputs and capital goods so transferred shall be duly accounted for by the transferee in his books of account.

Supply of capital goods or plant and machinery [section 18(6)]

 

Manner of claiming

In case of supply of capital goods or plant and machinery, on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery is reduced by five percentage points for every quarter or part thereof from the date of issue of invoice for such goods or the tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher.

Provided that where refractory bricks, moulds and dies, jigs and fixtures are supplied as scrap, the taxable person may pay tax on the transaction value ogstf such goods determined under section 15.

Hope this information will help you in your Professional endeavors. For further assistance/query, feel free to write to us.

Author: C S Ekta Maheshwari is the Author of this article and is Company Secretary by profession. The Author can be reached at csektamaheshwari14@gmail.com

Disclaimer: The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn’t constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information’s provided herein above.

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