TAX CREDIT ON CLOTH STOCKS
What will be the input tax credit for cloth traders on their stock as on 30 June 2017?
Reply by GST@GoI
Kindly refer to the transition rules.
Transitional arrangements for input tax credit is defined in section 140(1) of CGST Act.
Relevant extracts is as follows.
A registered person, who was either paying tax at a fixed rate or paying a fixed
amount in lieu of the tax payable under the existing law shall be entitled to take, in his
electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the appointed day subject to
the following conditions, namely:––
(i) such inputs or goods are used or intended to be used for making taxable
supplies under this Act;
(ii) the said registered person is not paying tax under section 10;
(iii) the said registered person is eligible for input tax credit on such inputs
under this Act;
(iv) the said registered person is in possession of invoice or other prescribed
documents evidencing payment of duty under the existing law in respect of inputs;
(v) such invoices or other prescribed documents were issued not earlier than
twelve months immediately preceding the appointed day.
tax credit on of cloth traders stock
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