TMI BlogAvailability Input Tax Credit - in special circumstances [Section 18 (1) & (2) of CGST Act]X X X X Extracts X X X X X X X X Extracts X X X X ..... Unregistered person Mandatory registration: If a person who has applied for registration under the Act within thirty days from the date on which he becomes liable to registration and has been granted such registration. [section 18(1)(a)] Available Not available Day immediately preceding the date from which he becomes liable to pay tax. Voluntary Registration [section 25(3)] : A taxable person takes voluntary registration even if his turnover is below exemption limit. [section 18(1)(b)] Available Not available Day immediately p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inished goods held in stock, or the credit claimed on capital goods in accordance with the provisions of clauses (c) and (d) of the said sub-section, shall be subject to the following conditions, namely,- (a) the input tax credit on capital goods, in terms of clauses (c) and (d) of sub-section (1) of section 18, shall be claimed after reducing the tax paid on such capital goods by five percentage points per quarter of a year or part thereof from the date of the invoice or such other documents on which the capital goods were received by the taxable person. (b) the registered person shall within a period of 30 days from the date of becoming eligible to avail the input ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to apply for registration within 30 days then he is not eligible to take ITC mentioned in sec. 18(1) (a) to (d). Examples Example 1:- Vishal Pipe Steel Ltd. Is manufacturer of iron steel. It has been assumed that iron steel which is the outward supply by Vinay steel ltd. Is exempt from payment of taxes until 31 march 2022. Iron steel become taxable with effect from 01 April 2022. The method of availment of input tax credit on inputs contained in stock and capital goods as on 31 march 2020. S. No. Particular Value CGST SGST IGST 1 Value of inputs in stock as on 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T ITC on value of inputs contained in semi-finished goods: - as all acquired within 1 year prior to the effective date on which goods become taxable, hence full ITC eligible 24,000 24,000 ITC on the value of inputs contained in finished goods :- As out of total stock of input 50,000 contained in finished goods inputs worth 10,000 are older than 1 year from effective date on which goods become taxable. Therefore, ITC on such inputs shall be disallowed. Thus, eligible credit 4000 @6% each (CGST + SGST) 2,400 2,400 Total credit available on inputs 26400 26400 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 August 14,000 On 21 August Mr. Narender has also purchased plant Machinery for 2,00,000 plus GST 28%. Mr. Narender purchased goods at uniform rate throughout the year 100 per unit GST paid 18%. Solution:- As per Provision of section 18(1)(c) of CGST Act 2017, Stock of Input in stock as on the day immediately preceding the date of grant of registration shall be eligible for ITC to the person who is getting himself voluntarily registered, In the given case such stock in 14,000 units (stock in hand on 21 October 2020. Thus, admissible amount is as follows Value of stock = 14,00,000 (i.e.,14,000 unit x 100 per unit) Tax paid thereon which is admissible ad ITC is 2,52,000 (14,00,000*18 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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