GST India Forum – Goods and Services Tax | Place for Experts Forums Bare Law Section 169- Credit of taxes for inputs held in stock to be allowed in certain situations

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  • Madrecha and CoMadrecha and Co
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    #362 |

    Credit of eligible duties and taxes in respect of inputs held in stock to be allowed in certain situations

    (1) A registered taxable person, who was not liable to be registered under the earlier 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 20.06.2012 or a first stage dealer or a second stage dealer or a registered importer, shall be entitled to take, in his electronic credit ledger, credit of eligible duties and taxes 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:

    (i) such inputs and / or goods are used or intended to be used for making taxable supplies under this Act;

    (ii) the said taxable person passes on the benefit of such credit by way of reduced prices to the recipient;

    (iii) the said taxable person is eligible for input tax credit on such inputs under this Act;

    (iv) the said taxable person is in possession of invoice and/or other prescribed documents evidencing payment of duty under the earlier law in respect of such inputs;

    (v) such invoices and /or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day; and

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

    PROVIDED that where a registered taxable 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 taxable person shall, subject to such conditions, limitations and safeguards as may be prescribed, be allowed to take credit at the rate and in the manner prescribed.

    (2) The amount of credit under sub-section (1) shall be calculated in such manner as may be prescribed.

    Explanation.— For the purpose of this section and section 170, section 171 and section 172, the expression “eligible duties and taxes” means­

    (i) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985(5 of 1986);

    (ii) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985(5 of 1986);

    (iii) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978);

    (iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957(58 of 1957);

    (v) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001(14 of 2001);

    (vi) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975);

    (vii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975); and

    (viii) the service tax leviable under section 66B of the Finance Act, 1994 (32 of 1994);— in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day.
    (CGST Law)

    (1) A registered taxable person, who was not liable to be registered under the earlier law or who was engaged in the sale of exempted goods under the earlier law but which are liable to tax under this Act, shall be entitled to take, in his electronic credit ledger, credit of the Value Added Tax [and entry 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:

    (i) such inputs and / or goods are used or intended to be used for making taxable supplies under this Act;

    (ii) the said taxable person passes on the benefit of such credit by way of reduced prices to the recipient;

    (iii) the said taxable person is eligible for input tax credit on such inputs under this Act;

    (iv) the said inputs were not [specified in Schedule—of the earlier law or in the rules made thereunder or in any notification issued under the earlier law] as inputs on which credit was not admissible under the earlier law;

    (v) the said taxable person is in possession of invoice and/or other prescribed documents evidencing payment of tax under the earlier law in respect of such inputs; and

    (vi) such invoice and /or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day.

    (2) The amount of credit under sub-section (1) shall be calculated in such manner as may be prescribed.

    (SGST Law)

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