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THE UNION TERRITORY GOODS AND SERVICES TAX ACT, 2017
TRANSITIONAL PROVISIONS
Section 18:
Transitional arrangements for input tax credit.
(1) A registered person,
other than a person opting to pay tax under
section 10 of the Central Goods and
Services Tax Act, shall be entitled to take, in his electronic credit ledger,
credit of the amount of Value Added Tax and Entry Tax, if any, 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, not later than
ninety days after the said day, 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 day; or
(iii) where the said amount of credit relates to goods sold under such exemption
notifications as are notified by the Government:
Provided further that so much of the
said credit as is attributable to any claim related to section 3, sub-section
(3) of section 5, section 6 or section 6A or sub-section (8) of section 8 of the
Central Sales Tax Act, 1956 that is not substantiated in the manner, and within
the period, prescribed in rule 12 of the Central Sales Tax (Registration and
Turnover) Rules, 1957 shall not be eligible to be credited to the electronic
credit ledger:
Provided also that an amount
equivalent to the credit specified in the second proviso shall be refunded under
the existing law when the said claims are substantiated in the manner prescribed
in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957.
(2) A registered person, other than a
person opting to pay tax under section 10 of the Central Goods and Services Tax
Act, shall be entitled to take, in his electronic credit ledger, credit of the unavailed input tax 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
input tax credit under the existing law and is also admissible as input tax
credit under this Act.
Explanation.—For the purposes of this section, the expression ‘‘unavailed input
tax credit’’ means the amount that remains after subtracting the amount of input
tax credit already availed in respect of capital goods by the taxable person
under the existing law from the aggregate amount of input tax 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 sale of
exempted goods or tax free goods or goods which have suffered tax at first point
of their sale in the Union territory and the subsequent sales of which are not
subject to tax in the Union territory under the existing law but which are
liable to tax under this Act or where the person was entitled to the credit of
input tax at the time of sale of goods, shall be entitled to take, in his
electronic credit ledger, credit of the value added tax and entry tax, if any,
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 tax under the existing law in respect of such
inputs; and
(iv) such invoices or other prescribed documents were issued not earlier than
twelve months immediately preceding the appointed day:
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 tax 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 sale of taxable goods as well as exempted goods or tax free goods
under the existing law but which are liable to tax under this Act, shall be
entitled to take, in his electronic credit ledger,—
(a) the amount of credit of the value added tax and entry tax, if any, carried
forward in a return furnished under the existing law by him in accordance with
the
provisions of sub-section (1); and
(b) the amount of credit of the value added tax and entry tax, if any, 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 tax free goods 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 value added tax and
entry tax, if any, in respect of inputs received on or after the appointed day
but the 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 tax paying document
of the same was recorded in the books of account 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 the 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 value added tax 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 of the
Central Goods and Services Tax Act;
(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 tax 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) The amount of credit under
sub-sections (3), (4) and (6) shall be calculated in such manner as may be
prescribed.
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