Input credit on closing stock as on appointed date

[Govind Gupta]

Dear Sirs

As we are trader and currently not eligible for input tax credit of CVD paid on our imports and ED paid on local purchases, what is the process of computation of credit to be claimed under GST, also as we know, there are two options for your total inventory

1. if you have duty paying document for the closing stock of inventory,

a. you are eligible for full credit ( what will the value of credit, is it what we have actually paid or some other computed value)

b. does this stock need to be less than 1 year old

c. do we need to transfer the credit to customers

d. is there any time limit to clear such stock

2. if we don’t have duty paying document for the closing stock of inventory,

a. are we eligible only for 40% of CGST portion

b. does this stock need to be less than 1 year old

c. do we need to transfer the credit to customers

d. is there any time limit to clear such stock

regards

Govind

[MUKUND THAKKAR]

a. you are eligible for full credit ( what will the value of credit, is it what we have actually paid or some other computed value)

balance stock value.

b. does this stock need to be less than 1 year old.

Not stock but invoice is not more than 1 years old on which basis you will claim.

c. do we need to transfer the credit to customers

no need to transfer any credit to your customer, if transaction is completed before appointed date.

d. is there any time limit to clear such stock

No.

a. are we eligible only for 40% of CGST portion.

if your goods suffer excise duty elements, if non duty paid stock is there you can not claim 40%

AI Summary

Input tax credit on closing stock: full credit for duty paid stock with invoice within one year; restrictions for non duty paid stock. Closing stock supported by duty paying documents entitles the trader to full input tax credit based on the balance stock value, provided the relevant invoice is not older than one year; no transfer of such credit to customers is required if transactions were completed before the appointed date and there is no time limit to clear the stock. Where closing stock lacks duty paying documentation, the trader cannot claim the 40% CGST concession when the goods are non duty paid despite having borne excise duty elements.