Closing balance of cenvat A/c & Vat A/c

[MEHUL ASHAR]

Respected Sir,

As regarding above subject, my query is whatever would be the closing balance of cenvat & vat A/c on 30-06-17, would it be considered as opening balance of CGST & SGST ON 01-07-17.Please reply.

[Rajagopalan Ranganathan]

Sir,

Section 140 (1) and 140 (2) of CGST Act, 2017 provides that-

140. (1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed:

Provided that the registered person shall not be allowed to take credit in the following circumstances, namely:-

(i) where the said amount of credit is not admissible as input tax credit under this Act; or

(ii) where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date; or

(iii) where the said amount of credit relates to goods manufactured and cleared under such exemption notifications as are notified by the Government.

(2) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day in such manner as may be prescribed:

Provided that the registered person shall not be allowed to take credit unless the said credit was admissible as CENVAT credit under the existing law and is also admissible as input tax credit under this Act.

Explanation.––For the purposes of this sub-section, the expression “unavailed CENVAT credit” means the amount that remains after subtracting the amount of CENVAT credit already availed in respect of capital goods by the taxable person under the existing law from the aggregate amount of CENVAT credit to which the said person was entitled in respect of the said capital goods under the existing law.

Please go through the above provision and if you satisfy the conditions then you are eligible to take credit of closing balance of cenvat & vat A/c on 30-06-17.

[MEHUL ASHAR]

THANK U VERY MUCH 4 UR REPLY SIR.

J SHRI KRISHNA

AI Summary

Transfer of pre GST CENVAT and VAT balances into input tax credit ledgers allowed subject to admissibility and return compliance. Section 140(1) and (2) permits a registered person, other than one under the composition scheme, to transfer CENVAT and VAT credit shown in returns for the period ending before the appointed day into the electronic credit ledger as input tax credit, subject to admissibility under GST, furnishing of all returns for the six months immediately preceding the appointed day, and exclusion of credits relating to supplies cleared under exemption notifications; unavailed CENVAT on capital goods may be taken only if admissible under both the existing law and GST.