Input Tax Credit of imported goods.

[ASHOK AMIN]

Dear Experts,

We are registered manufacturers and dealers under current central excise. We have some old stock of imported goods in our regsitered dealers godown. Now, can we take input tax credit of the old stock of imported goods in the GST regime. What will be the date of inward to calculate one year from the date of 1-7-17 for availment of input tax credit ? Can we take input tax credit for the import goods if it is older than one year from the date of GST implementation ?

[RAMESH PRAJAPATI]

Yes, you can claim input tax credit on the old stock but the documents should not be old more that 12 months. Other conditions are as under.

Section 140(3) of the CGST Act 2017 -- A registered person, who was not liable to be registered under the existing law, or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of notification No. 26/2012-Service Tax, dated the 20th June, 2012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, 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;
(ii) the said registered person is eligible for input tax credit on such inputs under this Act;
(iii) the said registered person is in possession of invoice or other prescribed documents evidencing payment of duty under the existing law in respect of such inputs;
(iv) such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day; and
(v) the supplier of services is not eligible for any abatement under this Act:
Provided that where a registered person, other than a manufacturer or a supplier of services, is not in possession of an invoice or any other documents evidencing payment of duty in respect of inputs, then, such registered person shall, subject to such conditions, limitations and safeguards as may be prescribed, including that the said taxable person shall pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to take credit at such rate and in such manner as may be prescribed.

AI Summary

Input Tax Credit Claim for Old Stock: Conditions Under GST Regime Explained, Including 12-Month Invoice Rule A registered manufacturer and dealer inquired about claiming input tax credit for old stock of imported goods under the GST regime. The response clarified that input tax credit can be claimed if the documents are not older than 12 months from the GST implementation date, July 1, 2017. The conditions include using the goods for taxable supplies, eligibility for input tax credit, possession of invoices evidencing duty payment, and that invoices are issued within 12 months preceding the appointed day. Additional provisions apply if a registered person lacks the necessary documentation.