Sec 140 Transitional arrangements for input tax credit, CGST Act, 2017

 

 

Sec 140 of CGST Act, 2017 Transitional arrangements for input tax credit

 

The below post explains about Transitional arrangements for input tax credit under section 140 of CGST Act,2017.

 

Section 140 of CGST Act, 2017 explains Transitional arrangements for input tax credit as below: (The amendments if any will also be updated here soon).

 

The extract of Section 140 of CGST Act,2017 quoted below:

 

140 Transitional arrangements for input tax credit.

 

140. (1) A registered person, other than a person opting to pay tax under section 10,

shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit 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 in such manner as may be prescribed:

Sec 140 Transitional arrangements for input tax credit, CGST Act, 2017Provided 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 date; or

(iii) where the said amount of credit relates to goods manufactured and cleared

under such exemption notifications as are notified by the Government.

(2) A registered person, other than a person opting to pay tax under section 10, shall be

entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT 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 CENVAT credit under the existing law and is also admissible as input

tax credit under this Act.
Explanation.––For the purposes of this sub-section, the expression “unavailed

CENVAT credit” means the amount that remains after subtracting the amount of CENVAT

credit already availed in respect of capital goods by the taxable person under the existing law

from the aggregate amount of CENVAT 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 manufacture of exempted goods or provision of exempted services,

or who was providing works contract service and was availing of the benefit of notification

No. 26/2012—Service Tax, dated the 20th June, 2012 or a first stage dealer or a second stage

dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his

electronic credit ledger, credit of eligible duties 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 duty under the existing law in respect of such

inputs;

(iv) such invoices or other prescribed documents were issued not earlier than

twelve months immediately preceding the appointed day; and

(v) the supplier of services is not eligible for any abatement under this Act:

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

duty 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 manufacture of taxable as well as

exempted goods under the Central Excise Act, 1944 or provision of taxable as well as exempted

services under Chapter V of the Finance Act, 1994, but which are liable to tax under this Act,

shall be entitled to take, in his electronic credit ledger, —

(a) the amount of CENVAT credit carried forward in a return furnished under the

existing law by him accordance with the provisions of sub-section (1); and

(b) the amount of CENVAT credit of eligible duties 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 services, 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

eligible duties and taxes in respect of inputs or input services received on or after the

appointed day but the duty or 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 duty or tax paying document

of the same was recorded in the books of accounts 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 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 eligible duties 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;

(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 duty 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) Notwithstanding anything to the contrary contained in this Act, the input tax credit

on account of any services received prior to the appointed day by an Input Service Distributor

shall be eligible for distribution as credit under this Act even if the invoices relating to such

services are received on or after the appointed day.

(8) Where a registered person having centralised registration under the existing law

has obtained a registration under this Act, such person shall be allowed to take, in his

electronic credit ledger, credit of the amount of CENVAT credit carried forward in a return,

furnished under the existing law by him, in respect of the period ending with the day

immediately preceding the appointed day in such manner as may be prescribed:

Provided that if the registered person furnishes his return for the period ending with

the day immediately preceding the appointed day within three months of the appointed day,

such credit shall be allowed subject to the condition that the said return is either an original

return or a revised return where the credit has been reduced from that claimed earlier:

Provided further that the registered person shall not be allowed to take credit unless

the said amount is admissible as input tax credit under this Act:

Provided also that such credit may be transferred to any of the registered persons

having the same Permanent Account Number for which the centralised registration was

obtained under the existing law.

(9) Where any CENVAT credit availed for the input services provided under the existing

law has been reversed due to non-payment of the consideration within a period of three

months, such credit can be reclaimed subject to the condition that the registered person has

made the payment of the consideration for that supply of services within a period of three

months from the appointed day.

(10) The amount of credit under sub-sections (3), (4) and (6) shall be calculated in

such manner as may be prescribed.

Explanation 1. —For the purposes of sub-sections (3), (4) and (6), the expression

“eligible duties” means––

(i) the additional duty of excise leviable under section 3 of the Additional Duties

of Excise (Goods of Special Importance) Act, 1957;

(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs

Tariff Act, 1975;

(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs

Tariff Act, 1975;

(iv) the additional duty of excise leviable under section 3 of the Additional

Duties of Excise (Textile and Textile Articles) Act, 1978;

(v) the duty of excise specified in the First Schedule to the Central Excise Tariff

Act, 1985;

(vi) the duty of excise specified in the Second Schedule to the Central Excise

Tariff Act, 1985; and

(vii) the National Calamity Contingent Duty leviable under section 136 of the

Finance Act, 2001;

in respect of inputs held in stock and inputs contained in semi-finished or finished

goods held in stock on the appointed day.

Explanation 2. —For the purposes of sub-section (5), the expression “eligible

duties and taxes” means––

(i) the additional duty of excise leviable under section 3 of the Additional Duties

of Excise (Goods of Special Importance) Act, 1957;

(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs

Tariff Act, 1975;

(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs

Tariff Act, 1975;

(iv) the additional duty of excise leviable under section 3 of the Additional

Duties of Excise (Textile and Textile Articles) Act, 1978;

(v) the duty of excise specified in the First Schedule to the Central Excise Tariff

Act, 1985;

(vi) the duty of excise specified in the Second Schedule to the Central Excise

Tariff Act, 1985;

(vii) the National Calamity Contingent Duty leviable under section 136 of the

Finance Act, 2001; and

(viii) the service tax leviable under section 66B of the Finance Act, 1994,

in respect of inputs and input services received on or after the appointed day.

 

The above information clarifies about Transitional arrangements for input tax credit under section 140 of CGST Act,2017.  

 

If you have any comments about Section 140 of CGST Act, 2017 explaining Transitional arrangements for input tax credit, share below your thoughts:

 

 

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Comments


love kumar: We are not registered with Central Excise. can we avail the credit on capital goods

KETAN Modi: We are trader/importer not registered with excise and don't claim any cenvat. OUR item in GST is 12% We paid CVD 12.5% by DEPB before 30th June. Will we get input credit of this CVd on stock we have on 30th June. Thanks

Nilesh Shah: under GST input credit against SAD is eligible for only closing stock as on 30.06.2017 but their is no clarification or guideline about SAD input/refund against goods sold before 01.07.2016, this is grey area , if some one go for earlier refund process of SAD against only goods sold and VAT paid, he may loose CVD and SAD value of closing stock as Bill of Exchange will be submitted to department , as a procedure you can receive back Bill of Exchange from department but not sure whether that part refund documents will be acceptable as a evidence to avail CVD and SAD for closing stock, if any one can answer will be appreciated

ANKIT SINGH: WHAT ABOUT DUTY PAID BY CO. IN UTTRAKHAND ETC ON THERE INPUT AND MANUFACTURE GOODS ON EXEMPTION NOTIFICATION AND CLEAR IT TO dtA IS dta CO. CAN CLAIM EXEMPTION ON TAX PAID BY EXEMMPTION NOTIFICATION

Mahesh Upreti: Hi Sir We are importer of Power tools and abrasive items, on 30th June 2017 we are having imported goods stock approx: Rs. 50 Lac. I just wanted to know that we are eligible for avail the benefit of SAD 4% and Excise Duty of 12.5% deposited as custom duty. Please inform we can take input of both 4% SAD and 12.5% Excise. Thanks

Suresh Chandra Sundrani: We are manufacturers,T.O.Less then 1.5 Cr.Have VAT Tax Invoice / CST Tax Invoice , in which Central Excise is not shown. Can we take Deemed Input tax credit of 60% on Steel items ? Our GST rate is 18%.

Dheeraj Dhawan: Hi , Can you confirm what to do with unavailed credit of Input/ Raw Material not carried forward in a return i.e. taken short in Excise Return ER1. Can we claimed that short cenvat availed as ITC under GST

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