1. ‘Carry forward’ of Input Tax Credit (ITC) as available on appointed day (i.e 1stJuly, 2017)
(I) Every registered person under GST is eligible to claim ITC against CENVAT credit carried forwarded in return pertaining for the period immediately preceeding appointed day(i.e on 30th June 2017) subject to satisfication of certain prescribed conditions:
- That amount of credit is admissible as ITC under GST also
- That all Returns for preceeding 6 months were filed under existing laws and alsoadmissible credit is reflected in last returns filed (i.e as on 30th June 2017)
(II) Electronic application in FORM GST TRAN‐1 is to be submitted within 90 days (earlier 60 days) from the appointed day. The Commissioner is also empowered to extend period notexceeding 90 days (totaling to 180 (90+90) days) . Thereafter credit should be reflected in electronic credit ledger of the registered person under GST.
- ‘Credit against Inputs’ as carried in inventory on appointed day
(I) Taxes and duties on inputs of goods as carried in raw material / semi‐finished / finished goods for manufacture of exempted goods under the existing law is also eligible for credit by eligible person subject to satisfaction of certain prescribed conditions :‐
- That eligible person was not liable to be registered under the existing law or
- That eligible person was engaged in manufacture of exempted goods or provision of exempted services or
- That eligible person was providing works contract service and was availing the benefit of notification or
- That eligible person was first stage dealer or second stage dealer or registered importer or depot of manufacturer
(II) Conditions to claim credit of inputs against stock as held on appointed day
- That taxpayer should be registered under GST
- That amount of credit is admissible as ITC under GST
- That inputs of goods to be used for making taxable supplies under GST
- That registered person is in possession of invoices / other prescribed documents evidencing payment of tax or duty
- That invoices were issued within 12 months prior to appointed day
- That supplier of services is not eligible for any abatement under Central GST (CGST)
- That credit is claimed in FORM GST TRAN‐1 shall specify separately the details of stockheld on the appointed day up to 6 tax periods from the appointed date indicating thedetails of supplies effected during each tax period
(III) Claim for credit of taxes paid on stock can be made for all aforesaid situations subject toavailability of duty paying documents, in case the duty paying documents are notavailable, deemed credit of 60% of CGST paid if the goods attract a CGST rate of 9% ormore, in other cases, deemed credit is 40% of CGST paid.
(IV) In cases when Integrated GST (IGST) is paid on sale of such goods, deemed credit would be available at the rate of 30% of IGST paid, if the IGST rate is 18% or above and 20% ofIGST paid in other cases for claiming deemed credit, the goods should be subjected toexcise duty or additional customs duty (in lieu of excise).
(V) Registered person is required to receive credit transfer document from manufacturer where value is more than INR 25,000/‐ and also product bears the brand name ofmanufacturer and goods are serially numbered by inventory management systems (e.g. vehicle chassis or fridge etc) to claim full credit of the excise duty paid.
- Credit of eligible duties and taxes ‘already’ paid under ‘existing’ act bysupplier against supply of inputs of goods or input of services ‘after’appointed day under GST
(I) Registered person is entitled to claim credit of eligible duties and taxes on inputs of Goods or input of services as received on or after the appointed day where duty or tax ‘already’paid by the supplier under the existing law subject to satisfication of certain conditions:
- That invoice or any other duty or taxpaying document of same was recorded in books of accounts within a period of 30 days from the appointed day (may be extended further for30 days by Commissioner);
- That registered person has furnished a statement as prescribed for credit.
- Material removed for Job Work or other processes
(I) Raw material, semi‐finished or finished goods was sent for job work under ‘existing’ law and also still lying with job worker on appointed day, job worker need not to pay GST onits return to principal where goods are returned within 6 months or extended period of 2months from appointed day.
(II) Principal is required to file an application in FORM GST TRAN‐1, specifying the stock or capital goods held by him as principal at place/places of the business or agents/branchseparately agent‐wise and branch‐wise.
(III) However if goods are not returned within abovementioned period, the ITC be recovered as arrear of tax under GST and also amount so recovered shall not be admissible as ITC.
- Duty paid goods ‘returned’ to place of business ‘after’ the appointment day Condition I: Goods be returned ‘within’ 6 months or such extended period from the appointed day
Supplier of the duty paid goods is entitled to get refund of excise duty paid by him underthe ‘existing’ law on removal of goods subject to satisfication of certain conditions.
- That duty paid on goods were delivered under ‘existing’ law within 6 months prior to theappointed day
- That goods are returned by non registered person
- That such goods are identifiable to satisfaction of GST authorities
However if such goods are returned by registered person, then the return of goodsshall be deemed to be a supply.
Condition II: Goods are returned ‘after’ 6 months or such extended period from the appointed day
- That goods are returned by registered person, then he will be liable to GST on suchsupply.
- That goods are returned by non registered person, then recipient will be liable topay GST under reverse charge mechanism (RCM)
- Issue of supplementary invoice, debit note or credit note when price under ‘existing’ contract is revised For ‘upward’ revision
(I) Registered Person is permitted to issue supplementary invoice or debit note within 30 days from the date of revision in prices of contract entered into before appointed day.
(II) It’s deemed to be supply in the month in which supplementary invoice / debit note is issued accordingly disclosure in return and payment of tax to be made.
For ‘downward’ revision
(I) Registered person is permitted to issue a credit note within 30 days from the date of revision in price of contract entered before appointed day
(II) Accordingly supplier of goods is permitted to reduce tax liability and to reverse, if anyinput credit.
- Refund Claim
(I) Claim for refund of CENVAT credit, duty, tax, interest or any amount paid under theexisting law is permitted in accordance with provision of existing law.
(II) Refund if allowed is to be paid in cash
(III) Recovery against wrong credit under existing law is to be deal as per the provision of GST.
- Treatment of long term contract
- If Contract as entered prior to GST introduction, the goods or services or both as supplied after introduction of GST be liable to tax under the GST.
- Taxability on supply of goods sent on ‘approval’ basis
(I) GST not payable against goods sent on approval basis, returned to supplier due torejection or non approval by buyer within 6 months or extended period of 2 months.
(II) GST be paid by buyer where goods ‘returned’ after 6 or 8 months as case may be
(III) GST be paid by supplier where not ‘returned’ after 6 or 8 months as case may be