Deemed Credit of SEZ goods

[Pranay Jain]

Whether deemed credit of 40% in CSGT will be available to first stage dealer on SEZ goods in his stock on appointed date 01st Jul17.

[Govind Gupta]

Hi Pranay

let us go into more details, ideally if goods have been subjected to any tax incidence, then ideally there should not be any credit available, the law is drafted to bring everyone on same level whether it is trader/manufacturer and when they were not able to claim credit of input tax earlier, they will be able to under the GST law.

regards

Govind

[Govind Gupta]

it should be read, if goods have not been subjected to any incidence of tax

[Pranay Jain]

True, but suppose I am second stage dealer and have received same SEZ (Excise exempted) goods from first stage dealer or any other second stage dealer than would I be entitled for 40% deemed credit as I have no way to determine which goods are excise paid or from SEZ.

AI Summary

Deemed input tax credit limited to goods that have not previously borne tax; proof of prior tax status governs entitlement. Entitlement to the deemed credit under transitional GST rules depends on whether goods held on the appointed date were previously subject to any tax incidence; taxed goods are not eligible while tax free goods may qualify. Where a purchaser cannot verify whether goods (for example, supplies from SEZs that were excise exempt) previously bore tax, entitlement to deemed credit is uncertain and hinges on verifiable evidence of the goods' prior tax status.