Goods and Services Tax – GST – By: – CA Akash Phophalia – Dated:- 14-6-2017 – The provision contained in section 140(1) of CGST Act 2017 states about the admissibility of input tax credit to the registered person migrating to the GST regime. The section 140(1) is as under :- Section 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
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is registered under the present law and migrates to the GST regime and opts for composition scheme under section 10 of the CGST Act 2017, then he shall be ineligible to carry forward credit under GST regime. Stipulations In order to carry forward input tax credit by the registered eligible person following stipulations needs to be fulfilled- a) The registered person has to file return for the period ending the day immediately preceding the appointed day under the existing law. Illustration :- Bhim Ltd is registered under the present excise law. If the appointed date for implementation of GST law is 1st July 2017, then Bhim Ltd has to file excise return for the period ending with 30th June 2017 under the present Central excise Act 1944. (b) The input tax credit should be admissible under the new GST regime. Illustration :- Bhim Ltd is carrying on the non-taxable and taxable business after the appointed date, then it will not be eligible to take credit of that portion of input tax credi
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ST regime. Amount of input tax credit to be carried forward The input tax credit admissible to be carried forward is the amount of Input tax credit as shown in the return filed for the period ending on the date immediately preceding the appointed date. Illustration :- Bhim Ltd has Cenvat credit balance of ₹ 10 lacs which it claims in the return filed for the month of June 2017, presuming 1st July 2017 as the appointed date, then by filing of return for the month of June 2017, Pinto Ltd can carry forward the Cenvat credit balance of ₹ 10 lacs as CGST. Similarly by filing return for the period ending with June 2017, it can carry forward input tax credit of state vat as SGST. Process to carry forward credit The registered person has to carry out the following process:- (a) Migrate as a taxable registered person (other than Composition dealer as per Section 10 of the CGST Act 2017) under the GST regime. (b) Submit an application electronically in Form GST TRAN-1,specifying the
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