THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
TRANSITIONAL PROVISIONS
Section 140:
Transitional arrangements for input tax credit.
(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
1[of eligible
duties]
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
4[within such time and] 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 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
4[within such time and] 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 5['goods
held in stock on the appointed day, within such time and in such manner
as may be prescribed, subject to'] [helldod old[goods held in stock on the
appointed day subject to] helldod] 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 5['existing
law, within such time and in such manner
as may be prescribed] [helldod old[existing law]
helldod] 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
5['goods held in stock on the appointed day,
within such time and in such manner
as may be prescribed, subject to]
[helldod old[goods held in stock on the appointed day subject to]
helldod] 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
5['credit under this Act, within such time and in
such manner
as may be prescribed, even if]
[helldod old[credit under
this Act even if]
helldod] 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 5['within such
time and in such manner]
[helldod old[in such manner]
helldod]
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 5[credit can be
reclaimed within such time and in such manner as may be prescribed, subject to]
[helldod old[credit can be reclaimed subject to]
helldod] 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.
(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;[helldod
2 omit[(iv) the additional duty of excise leviable under
section 3 of the Additional Duties of Excise (Textile and Textile Articles)
Act, 1978;] helldod]
(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
3[sub
sections (1) and (5)] [helldod old[sub
sections (5)] helldod]
, 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;[helldod
2 omit[(iv) the additional duty of excise leviable under
section 3 of the Additional Duties of Excise (Textile and Textile Articles)
Act, 1978;]helldod]
(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.
1[Explanation 3.—For removal of doubts, it is hereby clarified that the expression “eligible duties and taxes” excludes any cess which has not been specified in Explanation 1 or Explanation 2 and any cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975.]
2. Omitted Vide: Section 28 of CGST Amendment Act 2018 (w.e.f. 01.07.2017)
3. Substituted Vide: Section 28 of CGST Amendment Act 2018 (w.e.f. 01.07.2017)
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