CA Certificate Formats u/s 18(4) of CGST Act/SGST Act (Wholly Exempt )

By | May 10, 2018
(Last Updated On: May 10, 2018)

CA Certificate Formats u/s 18(4) of CGST Act/SGST Act (Become Wholly Exempt )

ICAI indirect tax Committee has issued the  issued a set of various draft ‘  Certificates under GST Law  (SGST/ CGST Acts)


Certificate under the State Goods and Services Tax Act, 2017 (in short “SGST Act”) and the Central Goods and Services Tax Act, 2017 (in short “CGST Act”) in terms of Section 18(4) of the said Acts  (Become Wholly Exempt)

1. M/s. __________________ (hereinafter referred to as the “Applicant’) is a registered person
vide GSTIN…………… and is having its principal place of business at
____________________________________________________ in the State of _______. The
Applicant has the following additional places of business duly registered in the State of
________:
a. ______________________________________________
b. ______________________________________________
The principal place of business and the additional places of business in the State of ______have
been duly registered with effect from ____________

2. The Applicant has been effecting taxable supplies of ……. (HSN: _____) w.e.f. _________ up
to_______. On and from________, such taxable supplies have become exempted and the
Applicant has ceased to discharge the taxes on such supplies.

3. In terms of Section 18(4) of the CGST and SGST Acts, where a taxable supply by a registered
person becomes exempt supply the Applicant who has availed input tax credit, shall be liable
pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger,
equivalent to the credit of input tax in respect of inputs held in stock, inputs contained in semifinished  or finished goods held in stock and on capital goods (as reduced by the prescribed
percentage points) used for such taxable supplies on the day immediately preceding the date on
which such taxable supplies become exempt supplies under the CGST / SGST Acts, 2017
i.e.______________.

4. We have examined the books of accounts and other relevant documents / records of the
Applicant and on the basis of such examination & the information and explanation furnished to
us, we hereby certify that, subject to our remarks / comments in para 6 infra, the Applicant is
required to pay an amount of Rs …………., by way of debit in the electronic credit ledger or
electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock
and inputs contained in semi-finished or finished goods held in stock used for taxable supplies
where tax invoices are not available with it, on the day immediately preceding the date on
which such taxable supplies become exempt supplies under the CGST / SGST Acts, 2017.

5. The relevant details of inputs held in stock and inputs contained in semi-finished or finished goods  held in stock as on ____________ (that is the day preceding the date on which such taxable  supplies become exempt supplies under the CGST / SGST Acts, 2017) where tax invoices are not  available with Applicant and the corresponding input tax credit is provided as Appendix A.

6. Remarks / comments (Refer Para 4 supra):

a. The description, value along with rate of GST of the inputs held in stock, inputs contained in
semi-finished or finished goods held in stock on the day immediately preceding the date on
which such taxable supplies become exempt supplies under the CGST / SGST Acts, 2017
i.e._____________, whose invoices are not available with Applicant, is based on the
management certificate furnished to us on_____________. According to the management
certificate the value of inputs as such, semi-finished goods, finished goods and capital goods
is an estimated price of such goods which is based on their prevailing market price as
on____________.

b. These estimates have been worked on as per the requirement of Section 18(4) of
SGST/CGST Acts, 2017 read with Rule 44(5) of CGST/SGST Rules, 2017 by the Applicant
and we have reviewed their assumptions and workings. Based on our examination of the
evidence supporting the assumptions, nothing has come to our attention, which causes us to
believe that assumptions do not provide a reasonable basis for the Estimate. Actual results
are likely to be different from the estimate since anticipated events might not occur as
expected and the variation might be material.

c. The stocks have not been physically verified. Reliance has been placed on the declaration
given by Applicant in respect of quantity of stocks held by it as on _____________whose
invoices are not available with it.
d. The inputs contained in semi-finished or finished goods held in stock are based on the
management certificate furnished to us on_____________

7. This certificate has been issued in terms of Section 18(4) of the SGST / CGST Acts, 2017 read
with Rule 44 (5) of the CGST / SGST Rules, 2017.

For _______________,
Chartered Accountants

Place: _____________
Date: ______________

_______________

                                                                                                              Partner
Firm Registration Number: _______
Membership Number: ______

Check points for the Chartered Accountant –
i. This certificate is required to be issued only if the tax invoices related to the inputs held in stock,
inputs contained in semi-finished or finished goods held in stock and on capital goods are not
available (Rule 44 (3) and Rule 44(5) of the CGST / SGST Rules, 2017). It may be noted that
the above said Rule 44 (3) stipulates issuance of a Certificate only in cases of non-possession of
invoices. The said Rule does not speak of issuance of Certificate if the registered person is in
possession of the relevant tax invoice.

ii. Verify registration particulars with the Registration Certificate.
iii. Check whether declaration in Form GST ITC-03 is filed by the tax payer on GST portal
declaring the above amounts in the respective columns.
iv. Check computation of input tax credit to be reversed by multiplying the effective rate of tax
specified under Notification 1/2017-CT (Rate) dated 28.06.2017 as amended from time to time
with the estimated value of inputs or input contained in semi-finished or finished goods.
v. Ensure that the amount is determined separately for input tax credit of Central Tax, State Tax,
Union Territory Tax and Integrated Tax and verified / reconciled with the ledger balances.
vi. The books of accounts and relevant documents / records of the Applicant should be thoroughly
verified to identify the supplies that were earlier taxable and have now become exempted. The
relevant notifications issued by the Government should be meticulously perused to identify the
date on which such taxable supplies have become exempted supplies.

vii. In case there are stock-in-transits as on the specified date of eligibility of credits, appropriate
treatment to be considered. (Note: Practical difficulty may arise to determine the credit amount
and invoice-wise details of items consumed at WIP / semi-finished and finished goods stage. This
may be computed by way of a fixed % and relevant assumptions / note may be included in the
Certificate).
viii. Check reversal of credit in Electronic Credit Ledger and payment in Electronic Cash Ledger of the
amount as specified in GST ITC -03.
ix. This certificate is to be suitably modified wherever applicable. The names of the registered
persons, dates, addresses etc. are only illustrative and needs to be modified in each case. Any
resemblance to any person / place is purely unintentional.
x. This certificate is to be issued in respect of a person who ceases to pay tax u/s 9 of the CGST /
SGST Acts, 2017 and opts to pay tax u/s 10 of the CGST / SGST Acts, 2017.

xi. Ensure that the certificate issued is in accordance with the Guidance note on Reports and
Certificates for special purpose issued by the ICAI.
xii. Ensure that a letter of representation is taken from the management for the details and information provided by them.
xiii. Ensure that a declaration is taken from the Applicant with regard to non-availability of tax
invoices and reasons for the same.

Appendix A to Certificate issued under the State Goods and Services Tax Act, 2017 (in short “SGST  Act”) and the Central Goods and Services Tax Act, 2017 (in short “CGST Act”) in terms of section 18(4) of the said Acts

Summary of stock of inputs held in stock and inputs contained in semi-finished or finished goods held  in stock on which input tax credit is required to be paid under section 18(4)-whose invoices are not available

CA Certificate Formats u/s 18(4) of CGST Act/SGST Act (Wholly Exempt )

For _______________.
Chartered Accountants

                                                                                                                 Partner

 Firm Registration No.:
Membership No.:

Place:

Date:

 


This is as per ICAI indirect tax Committee  draft ‘  Certificates under GST Law  (SGST/ CGST Acts)‘, with a list of checkpoints to be reviewed by Chartered Accountants before issuing the respective certificates, as listed here-under:CA Certificates under GST Law : ICAI issued Draft Formats

 Refer GST Audit : Free Reference Material , Limit, Format , Process

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