transitional credit.
Query (Issue) Started By: – priyesh agrawal Dated:- 19-8-2017 Last Reply Date:- 31-8-2017 Goods and Services Tax – GST
Got 19 Replies
GST
BACKGROUND
\nThe 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.
\nISSUE
\nin 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.
\nFurther 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.)
\nReply By Rajagopalan Ranganathan:
\nThe Reply:
\nSir,
\nSection 140 (1) of CGST Act stipulates that "a registered person, other than a person opting to pay tax under section 10, shall be entitle<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n seed cake is mentioned as exempt in the FAQs advertised in the newspaper by CBEC. However there is no Notification clarifying that cotton seed cake is exempt. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n (iii) ? If you fulfil that condition, proportionate reversal is required from ₹ 15 lakhs which is provisional. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n also involved. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n it is mentioned that it is exempt. The clarification in the advertisement has a disclaimer that it is only for educational purpose. It has no legal validity. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" transitional credit. Query (Issue) Started By: – priyesh agrawal Dated:- 19-8-2017 Last Reply Date:- 31-8-2017 Goods and Services Tax – GSTGot 19 RepliesGSTBACKGROUND 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 … Continue reading “transitional credit.”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-7251","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/7251","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7251"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/7251\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7251"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7251"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7251"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
For full text:-Visit the Source <\/a><\/p>\n
\nReply By KASTURI SETHI:
\nThe Reply:
\nFull 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.
\nReply By priyesh agrawal:
\nThe Reply:
\nRajagopalan 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.
\nKalyani 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.
\nKasturiji can you please put some more light on the case I mentioned in last paragraph of my query.
\nThank you all of you for your prompt reply.
\nReply By KASTURI SETHI:
\nThe Reply:
\nSh.Pyuish Ag<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nReply By priyesh agrawal:
\nThe Reply:
\nSir but my query relates to 140(1) as assessee is already registered in VAT
\nReply By Rajagopalan Ranganathan:
\nThe Reply:
\nSir,
\nSection 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.
\nSection 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<\/p>\n
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\nWe have already planned to reverse the credit but were having a doubt 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.
\nReply By Ganeshan Kalyani:
\nThe Reply:
\nI 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.
\nTo my knowledge the 'Oil cake' is taxable and 'De-oiled cake ' is exempt. Cotton Seed Cake contains oil , so it is taxable.
\nReply By KASTURI SETHI:
\nThe Reply:
\nIf taxable supply is also involved then proportionate reversal of ₹ 15 lakhs required.
\nReply By priyesh agrawal:
\nThe Reply:
\nNotification 2\/2017 central rate entry no 102 read as follows:
\nAquatic 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.
\nOn interpretation of the<\/p>\n
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\nReply By KASTURI SETHI:
\nThe Reply:
\nDear 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.
\nReply By vijay kumar:
\nThe Reply:
\nMr.Priyesh,
\nIf 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<\/p>\n
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