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Tran 1 credit on goods procured under Notfn No. 1/2011, Goods and Services Tax - GST

Issue Id: - 116734
Dated: 24-9-2020
By:- Kavali Ramanjeneyulu
Tran 1 credit on goods procured under Notfn No. 1/2011

  • Contents


one taxpayer was manufacturing yarn by using Polyster Staple fibre . Polyster staple fibre i.e. input was attracting 2% duty under Notification No. 1/2011 CE . As on 30.06.2017 . Under cenvat credit rules, goods attracting 2% duty under Notification No.. 1/2011-CE fall under the definition of Exempted goods. He was having closing balance Polyster Staple fibre and took credit in Tran 1 under table 7a. It is requested to clarify whether the said goods i.e. Polyster Staple Fiber will be used in the taxable supply under GST from 1.7.2017 is eligible for credit under Tran-1 as it was not eligible for credit under Cenvat Credit Rules .

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Showing Replies 1 to 4 of 4 Records

1 Dated: 25-9-2020
By:- Ganeshan Kalyani

Sir, as per Section 140(3)(i) it is allowed. The relevant text is reproduced below for your ready reference.

(3) "a registered person, who was not liable to be registered under the existing law, or who was engaged in the manufacture of exempted goods...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 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;

'this Act' means GST Act.

2 Dated: 25-9-2020
By:- Shilpi Jain

Yes sir he will be eligible for the credit for the closing stock on 30.06.2017 as per section 140(6) of the CGST Act as 2% is a fixed rate in lieu of tax payable.

3 Dated: 26-9-2020
By:- Ganeshan Kalyani

Yes, mam, sub-section (6) of sec.140 is more appropriate. Thanks

4 Dated: 28-9-2020
By:- Himansu Sekhar

In my view the ITC is not eligible. I am humby differing from the experts on the following grounds

His inputs are Polyster stable fibre attracting 2% duty as per Notf. no. 01/2011. It is exempted:

As per Section 140. (1)

A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit 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 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 date; or

(iii) where the said amount of credit relates to goods manufactured and cleared under such exemption notifications as are notified by the Government.:


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