THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
INPUT TAX CREDIT
Section 18: Availability of credit in special circumstances. (Relevant Rules 40 to 41A, Rule 44 to 44A)
(1) Subject to such
conditions and restrictions as may be prescribed—
a)
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 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 from which he becomes liable to
pay tax under the provisions of this Act;
b)
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 on the day
immediately preceding the date of grant of registration;
c)
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
on the day immediately preceding the date from which he becomes liable to pay
tax under section 9:
Provided
that the credit on capital goods shall be reduced by such percentage points
as
may be prescribed;
d)
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 on the day immediately preceding
the date from which such supply becomes taxable:
Provided
that the credit on capital goods shall be reduced by such percentage points
as
may be prescribed.
(2) A registered person shall not be entitled to take input tax credit under
sub-section (1) 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.
*(3) 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 unutilised in his electronic credit ledger to
such sold, merged, demerged, amalgamated, leased or transferred business in
such manner as may be prescribed.
(4) Where any registered person who has availed of input tax credit opts to pay
tax under section 10 or, where the goods or services or both supplied by him
become wholly exempt, he 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 and on capital goods, reduced by such percentage points
as may be prescribed, on the day immediately preceding the date of exercising
of such option or, as the case may be, the date of such exemption:
Provided that after payment of such amount, the balance of input tax credit, if
any, lying in his electronic credit ledger shall lapse.
(5) The amount of credit under sub-section (1) and the amount payable under
sub-section (4) shall be calculated in such manner
as may be prescribed.
(6) 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
reduced by such percentage points as may be prescribed 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 of such goods determined under
section 15.