Availability of credit in special circumstances Under GST (Section 18).
availability of credit in special circumstances under gst- In case of new registration, shifting from composition scheme & exempt supply becomes taxable supply [Section 18 (1)(a)]
a GST person who has applied for registration under the GST Act within 30 (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 (ITC) in respect of inputs tax credit 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 GST Act;
- In case of voluntary registration under sub-section (3) of section 25 shall be entitled to:
a person who takes registration under section 25 (3) of CGST Act shall be entitled to take credit of input tax (ITC) 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; [Section 18 (1)(b)]
- In case registered person ceases to pay tax under section 10, he shall be entitled to take credit of input tax.
where any registered person ceases to pay tax under section 10 of GST Act, he shall be entitled to take credit of input tax (ITC) in respect of inputs Tax Credit (ITC) 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 as per section 9 of CGST Act:
Provided that the Input tax credit on capital goods shall be reduced by such percentage points as may be prescribed; [Section 18 (1)(c)]
- In case exempt supply becomes taxable supply such person shall be entitled to take
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 Input tax credit (ITC) in respect of inputs (ITC) 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 [Section 18 (1)(d)]
- More than One year (expiry) of the date of issue of tax invoice not eligible for credit (Section 18 (2)
A GST registered person shall not be entitled to take input tax credit (ITC) under sub-section (1) in respect of any supply of goods or services or both to him after the expiry of (one) 1 year from the date of issue of tax invoice relating to such supply.
- 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 (ITC) which remains unutilized in his electronic credit ledger on gst portal to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed in [Section 18 (3) ].
- Where any registered person who has availed of input tax credit (ITC) opts to pay tax under section 10 of GST Act 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 on the common portal, equivalent to the credit of input tax ( ITC )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 (ITC), if any, lying in his electronic credit ledger shall lapse. [Section 18 (4)].
- The amount of credit (ITC) under sub-section (1) and the amount payable under sub-section (4) shall be calculated in such manner as may be prescribed. [Section 18 (5)].
- Sale of capital goods or plant and machinery after taking input tax credit (ITC) [Section 18 (6)].
In case of supply of capital goods or plant and machinery, on which input tax credit ( ITC ) has been taken, the registered person shall pay an amount equal to the input ITC 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 of GST Act, whichever is higher:
Provided that where refractory moulds and bricks, and fixtures and dies, and jigs are supplied as scrap, the taxable person may pay tax on the transaction value of such goods determined under section 15 of this act. [Section 18 (6)].
