Input tax credit on closing stock

[Guest]

dear sir

our client is a retailer dealing in textile and ready made garments . since fabric is exempt from excise can we claim credit on the stock of fabric held as on 30th June 2017 or should we interpret exemption of fabric as conditional exemption and therefore making them eligible for credit under gst provisions under section 140.

Umesh

AI Summary

Retailer Seeks Input Tax Credit on Pre-GST Fabric Stock; Expert Confirms 40% Credit Eligibility Under Transitional Rules A retailer dealing in textiles and ready-made garments inquired about claiming input tax credit on fabric stock held as of June 30, 2017, under GST provisions. During the Central Excise era, fabric was exempt, but it included duty-paid inputs. An expert advised that 40% or 60% credit could be claimed after notifying the department, as both textiles and garments now attract GST. The retailer questioned eligibility under transitional provisions, noting that goods should not have been unconditionally exempt. The expert clarified that deemed credit at 40% is available, with GST at 5% applicable on pre-GST fabric stock.