Goods and Services Tax – Started By: – priyesh agrawal – Dated:- 19-8-2017 Last Replied Date:- 31-8-2017 – BACKGROUND The assessee is dealing in extracting oil from cotton seed. earlier in VAT both oil and cotton seed cake were taxable but due to rate differences, they have a huge amount of credit lying in their stock in VAT regime. ISSUE in GST cotton seed oil cake is exempt as is used as cattlefeed. so if we carry the credit under sec 140(1) to GST will we be allowed to carry whole credit or has to reverse proportionate credit. Further what will happen if credit is in excess of the tax paid on the stock lying on 30.06.2017(eg: input credit is of 15 lac, but tax paid on stock lying as on 30.06.2017 is of ₹ 5lac only.) – Reply By Rajagopalan Ranganathan – The Reply = Sir, Section 140 (1) of CGST Act stipulates that 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 c
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. However there is no Notification clarifying that cotton seed cake is exempt. – Reply By KASTURI SETHI – The Reply = Full credit will not be allowed. Regarding the point raised by Sh.Kalyani Sir, if tariff rate is nil, no need of notifications. In pre- GST era, tariff rate was nil and now under 2306 is nil. Correct HSN 2306.10. – Reply By priyesh agrawal – The Reply = Rajagopalan sir, I know the provision but need help in interpretation. How to interpret word admissible. And will we get 100% credit. And what will happen in the case I mention in last paragraph. Kalyani ji as per notification no 2/2017 cgst rate cotton seed oil cake is exempt if used as cattle feed. Thus as per rule 42 we will get proportional credit. Kasturiji can you please put some more light on the case I mentioned in last paragraph of my query. Thank you all of you for your prompt reply. – Reply By KASTURI SETHI – The Reply = Sh.Pyuish Aggarwal Ji,. When you will file TRANS 1, balance of credit to be carried forwar
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om ₹ 15 lakhs which is provisional. – Reply By priyesh agrawal – The Reply = Sir but my query relates to 140(1) as assessee is already registered in VAT – Reply By Rajagopalan Ranganathan – The Reply = Sir, Section 140 (1) of CGST Act, 2017 deals with cenvat credit. Cenvat credit deals with credit of cenvat duty paid on manufactured goods and service tax paid on output services. Section 140 (1) of Madhaya predesh SGST Act, deals with credit of VAT. This section talks about credit of the amount of Value Added Tax, if any, carried forward in the return relating to the period ending with the day immediately preceding the appointed day, Even this Act stipulates that the registered person shall not be allowed to take credit where the said amount of credit is not admissible as input tax credit under this Act (Madhayapredesh SGST Act). Therefore if cotton seed oilcake is exempted under State GST Act, the you will not be allowed to take the transitional credit. Therefore you cannot take
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oubt over to reverse on whole 15 or on 5 only as tax paid on stock lying in closing stock is of rupees 5 lac only. – Reply By Ganeshan Kalyani – The Reply = I would request the querist to reproduce the phrase / text from the Notification which states that Cotton Seed Cake is exempt if it is used in Cattle Feed manufacturing. To my knowledge the 'Oil cake' is taxable and 'De-oiled cake ' is exempt. Cotton Seed Cake contains oil , so it is taxable. – Reply By KASTURI SETHI – The Reply = If taxable supply is also involved then proportionate reversal of ₹ 15 lakhs required. – Reply By priyesh agrawal – The Reply = Notification 2/2017 central rate entry no 102 read as follows: Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake. On interpretation of the said entry it can be said that deoilled cake, wheat bran, ha
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the advertisement has a disclaimer that it is only for educational purpose. It has no legal validity. – Reply By KASTURI SETHI – The Reply = Dear Querist,. You day your query relates to Section 140 (1) but it is not your choice or option. You are hit by Section 140 (3). First be sure about taxability of your product as advised by Sh.Ganeshan Kalyani, an expert. Pl. deeply into all the aspects involved in this situation. – Reply By vijay kumar – The Reply = Mr.Priyesh, If taxable supplies are also involved post-GST, I think the entire credit lying in balance as on 1.7.2017 can be carried forward. Sn.140(1) specifies only 3 conditions. First condition is that credit shall be eligible under both the laws – in this case, credit was eligible under VAT act and is eligible under GST also since it is meant for furtherance of business (if taxable and exempted supplies are there, you are governed by Section 17) . Second condition of previous six months returns should be satisfied. Third – no not
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