Saturday 7 January 2017

Section-18. Availability of credit in special circumstances

                 Section-18.                       Availability of credit in special circumstances


(1) A person who has applied for registration under the Act within thirty days from
the date on which he becomes liable to registration and has been granted such
registration shall, subject to such conditions and restrictions as may be
prescribed, be entitled to take credit of input tax in respect of inputs held in stock
and inputs contained in semi-finished or finished goods held in stock on the day
immediately preceding the date from which he becomes liable to pay tax under
the provisions of this Act.

(2) A person, who takes registration under sub-section (3) of section 23 shall,
subject to such conditions and restrictions as may be prescribed, be entitled to
take credit of input tax in respect of inputs held in stock and inputs contained in
semi-finished or finished goods held in stock on the day immediately preceding
the date of grant of registration.

(3) Where any registered taxable person ceases to pay tax under section 9, he shall,
subject to such conditions and restrictions as may be prescribed, be entitled to
take credit of input tax in respect of inputs held in stock, inputs contained in
semi-finished or finished goods held in stock and on capital goods on the day
immediately preceding the date from which he becomes liable to pay tax under
section 8:

PROVIDED that the credit on capital goods shall be reduced by such percentage
points as may be prescribed in this behalf

(4) Where an exempt supply of goods or services by a registered taxable person
becomes a taxable supply, such person shall, subject to such conditions and
restrictions as may be prescribed, be entitled to take credit of input tax in respect
of inputs held in stock and inputs contained in semi-finished or finished goods
held in stock relatable to such exempt supply and on capital goods exclusively
used for such exempt supply on the day immediately preceding the date from
which such supply becomes taxable:

PROVIDED that the credit on capital goods shall be reduced by such percentage
points as may be prescribed in this behalf.

(5) A taxable person shall not be entitled to take input tax credit under sub-section
(1), (2), (3) or (4), as the case may be, in respect of any supply of goods and /
or services to him after the expiry of one year from the date of issue of tax
invoice relating to such supply.

(6) Where there is a change in the constitution of a registered taxable person on
account of sale, merger, demerger, amalgamation, lease or transfer of the
business with the specific provision for transfer of liabilities, the said registered
taxable person shall be allowed to transfer the input tax credit that remains
unutilized in its books of accounts to such sold, merged, demerged,
amalgamated, leased or transferred business in the manner prescribed.

(7) Where any registered taxable person who has availed of input tax credit switches
over as a taxable person for paying tax under section 9 or, where the goods and
/ or services supplied by him become exempt absolutely under section 11, he
shall pay an amount, by way of debit in the electronic credit or 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 and on capital goods,
reduced by such percentage points as may be prescribed, on the day immediately
preceding the date of such switch over or, as the case may be, the date of such
exemption:

PROVIDED that after payment of such amount, the balance of input tax credit, if
any, lying in his electronic credit ledger shall lapse.

(8) The amount payable under sub-section (7) shall be calculated in such manner as
may be prescribed.

(9) The amount of credit under sub-section (1), (2), (3) and (4) shall be calculated in
such manner as may be prescribed.

(10) In case of supply of capital goods or plant and machinery, on which input
tax credit has been taken, the registered taxable person shall pay an amount
equal to the input tax credit taken on the said capital goods or plant and
machinery reduced by the percentage points as may be specified in this behalf or
the tax on the transaction value of such capital goods or plant and machinery
under sub-section (1) of section 15, whichever is higher:

PROVIDED FURTHER that where refractory bricks, moulds and dies, jigs and
fixtures are supplied as scrap, the taxable person may pay tax on the transaction
value of such goods under sub-section (1) of section 15.

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