Question6: My query is about one of my client who provides mining services and uses dumpers and excavators to provide this service. They purchased a Excavator in the Month of June, 2017 from a Dealer who is not registered under Central Excise but he is registered under VAT. Now my query in this regard is as under:

1. Whether the Excavator used by him will be treated as INPUT or Capital Good

2. Whether they can avail credit of VAT paid towards purchase of Excavator as SGST transition credit

3. Whether they can claim deemed credit of 60% on the Invoice under Transitional Provisions of section 140 of CGST Act.

Please provide reply at early and give point wise answer to the query

Answer: please see section 140 (3) of CGST Act for transitional provisions The credit can be availed on inputs WIP and /or finished goods it is not for capital goods The dumpers used for services are capital goods and not inputs (Ref accounting standard) The deemed credit scheme is not for service provider or manufacturer since your client is service provider so scheme of deemed credit will not apply (provisio to section 140(3) Important precaution for future Please take care if you are sending dumper from one state to other state in case of same client it will attract tax under schedule 1 clause 2 of CGST Act ( Please see section 25 CGST Act and schedule 1 of it)

(Reply dt. 17/10/2017)