Inputs held in the stock on the day of appointed day in case of Trading

[Guest]

Dear All Experts,

We have do two Business (1) manufacturing & (2) Trading, currently we are follow the rule 6(3)a of Cenvat Credit Rules-2004, maintain separate account of manufacturing inputs material & for the trading material also, revert service tax credit at turnover ratio prescribe in the central excise law. In above scenario please guide on following points.

1. Trading warehouse material on which we have not take the credit, we have not charged excise duty at the time of sales, not collect duty from our customer, but if duty paid stock laying in trading warehouse on 31^st March-2017. As a closing stock. also after implementation of GST, we have liable to pay GST on above duty paid trading goods, which excise duty paid but do not take credit , in the above case tax paid two time, first at the time of purchase paid excise duty & after 1^st April2017 GST payable, what action we are do? ,
2. We have take trading warehouse goods excise duty credit before 31^st march-2017? which invoice one year time limit not over In current law?, after take credit in excise law and carried forward under section 169 or 170 of GST law?
3. After 1^st April 2017 above credit eligible for carried forward under section 169 or 170 of GST law? But credit not appeared in the last return, then how we have save the credit of duty paid goods laying at trading warehouse s closing stock of 31^st march-2017.

[Ganeshan Kalyani]

Revised Draft Model GST Law has been published very recently .

[sreemannarayana B]

The revised Section 18 (4) of revised GST Law states as follows:

4) Where an exempt supply of goods or services by a registered taxable  person becomes a taxable supply, such person shall, subject to such  conditions and restrictions as may be prescribed, be entitled to take  credit of input tax in respect of inputs held in stock and inputs  contained in semi-finished or finishedgoods held in stock relatable to  such exempt supply and on capital goodsexclusively used for such exempt  supply on the day immediately precedingthe date from which such supply  becomes taxable:However,under Section 18(5) the rider is continued stating that, credit notavailable on any supply of goods and / or services after the expiry of oneyear from the date of issue of tax invoice relating to such supply. 

This amendment may solve your problem.

AI Summary

Input tax credit entitlement on stock held at transition allows credit for duty paid goods when exempt supplies become taxable. The revised Model GST provision permits input tax credit for inputs, semi finished and finished goods and capital goods exclusively used for an exempt activity where those supplies become taxable, limited to items held in stock immediately before the conversion date and subject to prescribed conditions; a separate rule disallows credit after one year from invoice issuance.