How to avail Input Tax Credit under GST if Person not registered under earlier law

By | August 1, 2017
(Last Updated On: August 1, 2017)

Question : What is the transitional credit that can be availed on the existing stocks held by a registered person under GST, who was not required to be registered under the existing law?

Answer: In terms of Rule 117(4) of the CGST Rules, 2017 (transitional provisions) read with Section 140(3) of the CGST Act, 2017 , a registered person who was not registered under the existing law and who is not
in possession of any document evidencing payment of central excise duty in respect of the goods held in
stock, shall be allowed credit at the rate of sixty per cent on such goods which attract central tax at the
rate of nine per cent or more and forty per cent for the other goods of the central tax applicable on supply
of such goods after 01st July 2017 and the said amount shall be credited in the electronic credit ledger after
the central tax payable on such supply has been paid.

In case where integrated tax is paid, the amount of ITC would be at the rate of thirty per cent and twenty per cent respectively of integrtaed tax. This facility is available for a maximum period of 6 months from the appointed day (i.e. upto 31st December, 2017) or till the goods are sold out, whichever is earlier.

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