{"id":3765,"date":"2017-01-02T09:55:42","date_gmt":"2017-01-02T04:25:42","guid":{"rendered":"https:\/\/taxclick.org\/?p=3765"},"modified":"2017-01-02T09:56:43","modified_gmt":"2017-01-02T04:26:43","slug":"transitional-provisions-part-vi","status":"publish","type":"post","link":"https:\/\/taxclick.org\/type\/gst\/transitional-provisions-part-vi\/","title":{"rendered":"Transitional Provisions-Part-VI"},"content":{"rendered":"<h3 style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><strong>Credit of eligible duties and taxes on inputs held in stock to be allowed to a taxable person switching over from composition scheme<\/strong><\/span><\/h3>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><strong>\u00a0<\/strong>The section 172 (146 in old draft) dictates the provision and conditions, on fulfillment of which a registered taxable person becomes eligible to avail the cenvat of the inputs held in stock if he opts to switch over from composition scheme. The sections reads as follows:<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><em>Registered taxable person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the earlier law (hereinafter referred to in this section as a \u201ccomposition taxpayer\u201d), shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed date subject to the following conditions:<\/em><\/span><\/p>\n<ul style=\"text-align: justify;\">\n<li><span style=\"font-size: 12pt;\"><em>such inputs and \/ or goods are used or intended to be used for making taxable supplies under this Act;<\/em><\/span><\/li>\n<\/ul>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><em>(ii) the said person is not paying tax under section 9;<\/em><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><em>(iii) the said taxable person is eligible for input tax credit on such inputs under this Act;<\/em><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><em>(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 inputs; and<\/em><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><em>(v) such invoices and \/or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day. (CGST)<\/em><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">A worth noting change bought in this section is that earlier there was an additional condition which stated that the cenvat which the assessee intends to avail should have been allowed to him under the previous law also but he was not availing merely because he had opted composition scheme. This condition is now dropped. Thus even if certain inputs were not allowed under the previous law but are allowed under the new law; cenvat can be availed on them.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">But yet there is one problem. The conditions also state that the invoice on which cenvat is been availed should not be older than 12 months. To comply this condition, it has to be ascertained that which all invoices are forming the stock as on date. Also such assessees who are having old stock won\u2019t be allowed to avail the cenvat on their stock.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">Another change bought in this relation is that the old draft prescribed the use of generally accepted accounting principles to calculate the credit to be availed, whereas the new draft states that the procedure shall be prescribed separately for such calculation.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">The old draft contained another provision which has been deleted in the new draft. It reads as follows:<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><em>The amount taken as credit under sub-section (1) shall be recovered as an arrear of tax under this Act from the taxable person if the said amount is found to be recoverable as a result of any proceeding instituted, whether before or after the appointed day, against such person under the earlier law<\/em><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">The provisions for SGST are similar except that one condition has been replaced there also. The condition (iii) read as follows:<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><em>the said taxable person was eligible to claim input tax credit on purchase of such inputs and\/or goods under the earlier law but for his being a composition taxpayer under the said law<\/em><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">This condition has been replaced by the following condition:<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><em>the said inputs were not [specified in Schedule&#8212; 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;<\/em><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">The effect of this is that if the inputs were not allowed under the old law by being specified in a particular schedule, then credit of those input will not be allowed under the new law too.<\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\">You may visit us at\u00a0 <a href=\"http:\/\/www.capradeepjain.com\">www.capradeepjain.com<\/a><\/span><\/p>\n<p style=\"text-align: justify;\"><span style=\"font-size: 12pt;\"><a href=\"https:\/\/www.facebook.com\/GSTTODAYBYPRADEEPJAIN\">https:\/\/www.facebook.com\/GSTTODAYBYPRADEEPJAIN<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Credit of eligible duties and taxes on inputs held in stock to be allowed to a taxable person switching over from composition scheme \u00a0The section 172 (146 in old draft) dictates the provision and conditions, on fulfillment of which a registered taxable person becomes eligible to avail the cenvat of the inputs held in stock &#8230; <a title=\"Transitional Provisions-Part-VI\" class=\"read-more\" href=\"https:\/\/taxclick.org\/type\/gst\/transitional-provisions-part-vi\/\" aria-label=\"More on Transitional Provisions-Part-VI\">Read more<\/a><\/p>\n","protected":false},"author":17,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[15],"tags":[456],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Transitional Provisions-Part-VI<\/title>\n<meta name=\"description\" content=\"The effect of this is that if the inputs were not allowed under the old law by being specified in a particular schedule, then credit of those input will not be allowed under the new law too.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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