Input Tax Credit on Capital Goods in transit

[SR AGRAWAL]

Dear Experts,

I have to submit if the Input Tax Credit will be admissible in case Capital Goods as defined under Rule 2(a) of the CENVAT Credit Rules, 2004 cleared prior to 01.07.2017 and received in the factory of manufacturer after 01.07.2017?

Section 140 of CGST Act, 2017 contains the transitional provisions and Sub-section (5) relating to Inputs and Input Services, but no such provisions are found in respect of Capital Goods.

Kindly advise.

Thanks,

S R AGRAWAL.

AI Summary

Input tax credit on capital goods: transitional eligibility hinges on carry forward of unavailed CENVAT credit and documentation.
Whether input tax credit is allowable for capital goods in transit is contested: Section 140(5) covers inputs and input services but omits capital goods, while Section 140(2) permits claiming unavailed CENVAT credit for capital goods carried forward if such credit was admissible under the existing law and meets CGST admissibility; transitional rules require itemised disclosure of amounts availed and unavailed as on the appointed day. Practice and an FAQ indicate non-availability in many views, though some regard the omission as inadvertent and advise seeking administrative remedy.