Ch 42 - Transitional Provisions | GST Saral by CA Dhruv Aggarwal PDF Download

 Page 1


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 42 - Transi ti onal provi si ons at the ti me of swi tchi ng to GST on 1- 
7-2017 
 
 
 
 
 
CHAPTER 42 
 
Transitional provisions at the time of switching  to GST on 1-7-2017 
 
EXECUTIVE SUMMARY 
 
?   Taxable Persons who are paying service tax, State Vat or Central Excise are required to migrate to 
GST. They will get temporary PAN based registration number. Final registration will be granted after 
submitting necessary information and papers - section 139 of CGST Act. 
?   A manufacturer who is having Cenvat Credit balance in his return on 30-6-2017 can carry forward 
his Cenvat credit as CGST Credit. He can also take unavailed Cenvat credit of excise duty paid on 
capital goods - section 140(1) and 140(2) of CGST Act. He has to submit application in form GST 
TRAN 1 within 60 days. 
?   A dealer or manufacturer who has input tax credit under State Vat or Entry Tax in his return on 30- 
6-2017 can carry forward his input tax credit as SGST Credit. He can also take unavailed credit of 
State Vat paid on capital goods - section 140(1) and 140(2) of SGST Act. He has to submit 
application in form GST TRAN 1 within 60 days. 
?   If goods were supplied under CST Act, details of claims and CST forms (C, F, H, I, E-I/E-II shall 
be submitted within 60 days - proviso to rule 1(1) of Transitional Provision Rules. It seems the 
provision is for those availing State incentives of refund of CST, since otherwise, input tax credit of 
Central Sales Tax (CST) is not admissible. 
?   A taxable person who was not eligible to take Cenvat Credit but is now under GST can take input 
tax credit of excise duty which was paid on the stock with him, if he has Invoice or other documents 
evidencing payment of excise duty. He has to submit stock statement - section 140(3) of CGST Act. 
?   A taxable person who was not earlier under Central Excise but is now under GST and does not 
have excise duty paying documents evidencing payment of excise duty, can take input tax credit of 
40% of CGST payable by him. He takes credit when he sales this stock after 1-7-2017 by charging 
CGST.  He can sale old stock  upto six months.  He has to submit stock  statement  and submit 
statement in form GST TRAN - - proviso to section 140(3) of CGST Act. 
?   A taxable person who was not earlier under State Vat but is now under GST can take input tax 
credit of State Vat which was paid on the stock with him, if he has tax invoices or other documents 
evidencing payment of State Vat. He has to submit stock statement - section 140(3) of SGST Act. 
?   A taxable person who was not earlier under State Vat or was under composition scheme but is now 
under GST and does not have documents evidencing payment of State Vat, can take input tax credit 
of 40% of SGST payable by him. He takes credit when he sales this stock after 1-7-2017 by 
charging SGST. He can sale old stock upto six months. He has to submit stock statement and submit 
statement in form GST TRAN - - proviso to section 140(3) of SGST Act. 
Page 2


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 42 - Transi ti onal provi si ons at the ti me of swi tchi ng to GST on 1- 
7-2017 
 
 
 
 
 
CHAPTER 42 
 
Transitional provisions at the time of switching  to GST on 1-7-2017 
 
EXECUTIVE SUMMARY 
 
?   Taxable Persons who are paying service tax, State Vat or Central Excise are required to migrate to 
GST. They will get temporary PAN based registration number. Final registration will be granted after 
submitting necessary information and papers - section 139 of CGST Act. 
?   A manufacturer who is having Cenvat Credit balance in his return on 30-6-2017 can carry forward 
his Cenvat credit as CGST Credit. He can also take unavailed Cenvat credit of excise duty paid on 
capital goods - section 140(1) and 140(2) of CGST Act. He has to submit application in form GST 
TRAN 1 within 60 days. 
?   A dealer or manufacturer who has input tax credit under State Vat or Entry Tax in his return on 30- 
6-2017 can carry forward his input tax credit as SGST Credit. He can also take unavailed credit of 
State Vat paid on capital goods - section 140(1) and 140(2) of SGST Act. He has to submit 
application in form GST TRAN 1 within 60 days. 
?   If goods were supplied under CST Act, details of claims and CST forms (C, F, H, I, E-I/E-II shall 
be submitted within 60 days - proviso to rule 1(1) of Transitional Provision Rules. It seems the 
provision is for those availing State incentives of refund of CST, since otherwise, input tax credit of 
Central Sales Tax (CST) is not admissible. 
?   A taxable person who was not eligible to take Cenvat Credit but is now under GST can take input 
tax credit of excise duty which was paid on the stock with him, if he has Invoice or other documents 
evidencing payment of excise duty. He has to submit stock statement - section 140(3) of CGST Act. 
?   A taxable person who was not earlier under Central Excise but is now under GST and does not 
have excise duty paying documents evidencing payment of excise duty, can take input tax credit of 
40% of CGST payable by him. He takes credit when he sales this stock after 1-7-2017 by charging 
CGST.  He can sale old stock  upto six months.  He has to submit stock  statement  and submit 
statement in form GST TRAN - - proviso to section 140(3) of CGST Act. 
?   A taxable person who was not earlier under State Vat but is now under GST can take input tax 
credit of State Vat which was paid on the stock with him, if he has tax invoices or other documents 
evidencing payment of State Vat. He has to submit stock statement - section 140(3) of SGST Act. 
?   A taxable person who was not earlier under State Vat or was under composition scheme but is now 
under GST and does not have documents evidencing payment of State Vat, can take input tax credit 
of 40% of SGST payable by him. He takes credit when he sales this stock after 1-7-2017 by 
charging SGST. He can sale old stock upto six months. He has to submit stock statement and submit 
statement in form GST TRAN - - proviso to section 140(3) of SGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
?   If goods were cleared by supplier prior to 1-7-2017 by paying excise duty and State Vat but goods 
were received after 1-7-2017  by recipient,  input tax credit of such excise duty or State Vat is 
available if such invoice was recorded in books of account within 30 days i.e. before 30-7-2017. He 
has to furnish specified details - section 140(5) of CGST Act and SGST Act. 
?   If material was sent for job work and was lying with job worker, input tax credit can be taken on 
submission of details - section 141 of CGST Act and SGST Act. 
?   If goods were sent on approval basis and were not with the taxable person on 1-07-2017, details 
are to be submitted in form GST TRAN-1. 
42.1 Transition of persons registered under excise, State  Vat or service tax 
 
Taxable Persons who are paying service tax, State Vat or Central Excise are required to migrate to GST. 
They will get temporary PAN based registration number. Final registration will be granted after submitting 
necessary information and papers - section 139 of CGST Act. 
Most of the existing taxable persons have already migrated to GST Registration, even if GST Law is not yet 
made effective. 
See procedure in the chapter 'Basic Procedures in GST'. 
 
42.2 Input Tax Credit while Switching  over from existing tax structure to GST 
 
The provisions are summarized below. 
 
42.2-1 Eligible Cenvat  Credit carried forward 
 
Eligible Cenvat credit on inputs and input services can be carried forward - section 140(1) of CGST Act. 
Unavailed Cenvat Credit on eligible capital goods not carried forward in a return can taken - section 140(2) of 
CGST Act. 
 
The manufacturer has to submit application in form GST TRAN 1 within 60 days - rule 1(1) of Transitional 
Provisions. 
 
As per section 140 of CGST Act, such carry forward is automatic. However, the rule uses the word 'apply'. 
This implies that such carry forward is not automatic and permission is required. 
42.2-2 Eligible State  Vat Credit and entry tax carried forward 
 
Eligible State Vat credit and entry tax credit can be carried forward - section 140(1) of SGST Act. 
 
Unavailed State Vat Credit and entry tax credit on eligible capital goods not carried forward in a return can 
taken - section 140(2) of SGST Act. 
He has to submit application in form GST TRAN 1 within 60 days - rule 1(1) of Transitional Provisions. 
 
Details of sales under CST Act - If goods were supplied under CST Act, details of claims and CST forms 
(C, F, H, I, E-I/E-II shall be submitted within 60 days - proviso to rule 1(1) of Transitional Provision Rules. 
 
It seems the provision is for those availing State incentives of ref und of CST, since otherwise, input tax credit 
of Central Sales Tax (CST) is not admissible. 
42.2-3 Eligible  duties  and taxes  on goods which were held in stock on appointed day, if person was 
not eligible to take  Cenvat  credit or Vat credit earlier 
A registered  person who  was not liable  to be registered  under earlier  law or who  was engaged  in the 
manufacture  of exempted  goods or provision of exempted  service or who was providing works contract 
service and paying service tax under abatement scheme under Notification No. 26/2012-ST dated 20-6-2012 
or first stage dealer or second stage dealer or a registered importer or a depot of a manufacturer, shall be 
Page 3


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 42 - Transi ti onal provi si ons at the ti me of swi tchi ng to GST on 1- 
7-2017 
 
 
 
 
 
CHAPTER 42 
 
Transitional provisions at the time of switching  to GST on 1-7-2017 
 
EXECUTIVE SUMMARY 
 
?   Taxable Persons who are paying service tax, State Vat or Central Excise are required to migrate to 
GST. They will get temporary PAN based registration number. Final registration will be granted after 
submitting necessary information and papers - section 139 of CGST Act. 
?   A manufacturer who is having Cenvat Credit balance in his return on 30-6-2017 can carry forward 
his Cenvat credit as CGST Credit. He can also take unavailed Cenvat credit of excise duty paid on 
capital goods - section 140(1) and 140(2) of CGST Act. He has to submit application in form GST 
TRAN 1 within 60 days. 
?   A dealer or manufacturer who has input tax credit under State Vat or Entry Tax in his return on 30- 
6-2017 can carry forward his input tax credit as SGST Credit. He can also take unavailed credit of 
State Vat paid on capital goods - section 140(1) and 140(2) of SGST Act. He has to submit 
application in form GST TRAN 1 within 60 days. 
?   If goods were supplied under CST Act, details of claims and CST forms (C, F, H, I, E-I/E-II shall 
be submitted within 60 days - proviso to rule 1(1) of Transitional Provision Rules. It seems the 
provision is for those availing State incentives of refund of CST, since otherwise, input tax credit of 
Central Sales Tax (CST) is not admissible. 
?   A taxable person who was not eligible to take Cenvat Credit but is now under GST can take input 
tax credit of excise duty which was paid on the stock with him, if he has Invoice or other documents 
evidencing payment of excise duty. He has to submit stock statement - section 140(3) of CGST Act. 
?   A taxable person who was not earlier under Central Excise but is now under GST and does not 
have excise duty paying documents evidencing payment of excise duty, can take input tax credit of 
40% of CGST payable by him. He takes credit when he sales this stock after 1-7-2017 by charging 
CGST.  He can sale old stock  upto six months.  He has to submit stock  statement  and submit 
statement in form GST TRAN - - proviso to section 140(3) of CGST Act. 
?   A taxable person who was not earlier under State Vat but is now under GST can take input tax 
credit of State Vat which was paid on the stock with him, if he has tax invoices or other documents 
evidencing payment of State Vat. He has to submit stock statement - section 140(3) of SGST Act. 
?   A taxable person who was not earlier under State Vat or was under composition scheme but is now 
under GST and does not have documents evidencing payment of State Vat, can take input tax credit 
of 40% of SGST payable by him. He takes credit when he sales this stock after 1-7-2017 by 
charging SGST. He can sale old stock upto six months. He has to submit stock statement and submit 
statement in form GST TRAN - - proviso to section 140(3) of SGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
?   If goods were cleared by supplier prior to 1-7-2017 by paying excise duty and State Vat but goods 
were received after 1-7-2017  by recipient,  input tax credit of such excise duty or State Vat is 
available if such invoice was recorded in books of account within 30 days i.e. before 30-7-2017. He 
has to furnish specified details - section 140(5) of CGST Act and SGST Act. 
?   If material was sent for job work and was lying with job worker, input tax credit can be taken on 
submission of details - section 141 of CGST Act and SGST Act. 
?   If goods were sent on approval basis and were not with the taxable person on 1-07-2017, details 
are to be submitted in form GST TRAN-1. 
42.1 Transition of persons registered under excise, State  Vat or service tax 
 
Taxable Persons who are paying service tax, State Vat or Central Excise are required to migrate to GST. 
They will get temporary PAN based registration number. Final registration will be granted after submitting 
necessary information and papers - section 139 of CGST Act. 
Most of the existing taxable persons have already migrated to GST Registration, even if GST Law is not yet 
made effective. 
See procedure in the chapter 'Basic Procedures in GST'. 
 
42.2 Input Tax Credit while Switching  over from existing tax structure to GST 
 
The provisions are summarized below. 
 
42.2-1 Eligible Cenvat  Credit carried forward 
 
Eligible Cenvat credit on inputs and input services can be carried forward - section 140(1) of CGST Act. 
Unavailed Cenvat Credit on eligible capital goods not carried forward in a return can taken - section 140(2) of 
CGST Act. 
 
The manufacturer has to submit application in form GST TRAN 1 within 60 days - rule 1(1) of Transitional 
Provisions. 
 
As per section 140 of CGST Act, such carry forward is automatic. However, the rule uses the word 'apply'. 
This implies that such carry forward is not automatic and permission is required. 
42.2-2 Eligible State  Vat Credit and entry tax carried forward 
 
Eligible State Vat credit and entry tax credit can be carried forward - section 140(1) of SGST Act. 
 
Unavailed State Vat Credit and entry tax credit on eligible capital goods not carried forward in a return can 
taken - section 140(2) of SGST Act. 
He has to submit application in form GST TRAN 1 within 60 days - rule 1(1) of Transitional Provisions. 
 
Details of sales under CST Act - If goods were supplied under CST Act, details of claims and CST forms 
(C, F, H, I, E-I/E-II shall be submitted within 60 days - proviso to rule 1(1) of Transitional Provision Rules. 
 
It seems the provision is for those availing State incentives of ref und of CST, since otherwise, input tax credit 
of Central Sales Tax (CST) is not admissible. 
42.2-3 Eligible  duties  and taxes  on goods which were held in stock on appointed day, if person was 
not eligible to take  Cenvat  credit or Vat credit earlier 
A registered  person who  was not liable  to be registered  under earlier  law or who  was engaged  in the 
manufacture  of exempted  goods or provision of exempted  service or who was providing works contract 
service and paying service tax under abatement scheme under Notification No. 26/2012-ST dated 20-6-2012 
or first stage dealer or second stage dealer or a registered importer or a depot of a manufacturer, shall be 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
entitled to take credit in his electronic cash register of eligible duties in respect of inputs in stock and inputs 
contained in semi-finished or finished goods lying in stock. There should be duty paying document with him 
which are not more than 12 month old. The supplier of service should not be eligible for any abatement under 
CGST Act - section 140(3) of CGST Act and section 140(3) of SGST Act. 
A taxable person who was not eligible to take Cenvat Credit but is now under GST can take input tax credit 
of excise duty which was paid on the stock with him, if he has Invoice or other documents evidencing payment 
of excise duty. 
A taxable person who was not earlier under State Vat but is now under GST can take input tax credit of State 
Vat which was paid on the stock with him, if he has tax invoices or other documents evidencing payment of 
State Vat. He has to submit stock statement - section 140(3) of SGST Act. 
He has to submit stock statement in prescribed form. 
 
42.2-4  Deemed  Input tax  credit of tax  on  stock  if invoice  of supplier showing  tax  paid  is  not 
available 
Even if duty paying document is not available, input tax credit will be available on goods held in stock on 1-7- 
2017, at such rates and in such manner as may be prescribed - proviso to section 140(3) of CGST Act and 
section 140(3) of CGST Act. 
As per rule 1(3) of Transitional Provisions Rules, he can take input tax credit of 40% of his sale price, at the 
time of making sale. He can make sale within six months after 1-7-2017. 
The provisions of rule 1(3) are as follows : 
 
Deemed input tax credit of excise duty on goods in stock - A taxable person who was not earlier under 
Central Excise but is now under GST and does not have excise duty paying documents evidencing payment of 
excise duty, can take input tax credit of 40% of CGST payable by him. He takes credit when he sales this 
stock after 1-7-2017 by charging CGST. He can sale old stock upto six months. He has to submit stock 
statement and submit statement in form GST TRAN within 60 days. 
Deemed input  tax credit of State Vat on goods in stock - A taxable person who was not earlier under 
State Vat or was under composition scheme but is now under GST and does not have documents evidencing 
payment of State Vat, can take input tax credit of 40% of SGST payable by him. He takes credit when he 
sales this stock after 1-7-2017 by charging SGST. He can sale old stock upto six months. He has to submit 
stock statement and submit statement in form GST TRAN within 60 days. 
42.2-5 Credit if taxable  person was manufacturing exempted as well as taxable  goods and providing 
exempted or taxable  services 
A taxable person who was manufacturing exempted as we l as taxable goods and providing exempted or 
taxable services can take input tax credit of Cenvat credit as per return f iled under excise law, if he is liable to 
pay CGST and SGST. He can also take input tax credit of duty and Vat paid on inputs held in stock and 
inputs contained in semi-finished goods or finished goods held in stock on 1-7-2017 relating to such exempted 
goods or tax free goods- - section 140(4) of CGST Act and section 140(4) of SGST Act. 
42.2-6 Credit of duty  paid  inputs  or service  tax paid  on input  services  received after 1-7-2017 but 
duty was paid earlier 
Credit of duty paid inputs or service tax paid on input services received after 1-7-2017 but duty was paid 
prior to 1-7-2017 will be available if document was recorded in books of account within 30 days. This period 
of 30 days can be extended by Commissioner by further 30 days - section 140(5) of CGST Act. 
Similar provision in respect of Vat paid on goods which were received after 1-7-2017 - section 140(5) of 
Page 4


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 42 - Transi ti onal provi si ons at the ti me of swi tchi ng to GST on 1- 
7-2017 
 
 
 
 
 
CHAPTER 42 
 
Transitional provisions at the time of switching  to GST on 1-7-2017 
 
EXECUTIVE SUMMARY 
 
?   Taxable Persons who are paying service tax, State Vat or Central Excise are required to migrate to 
GST. They will get temporary PAN based registration number. Final registration will be granted after 
submitting necessary information and papers - section 139 of CGST Act. 
?   A manufacturer who is having Cenvat Credit balance in his return on 30-6-2017 can carry forward 
his Cenvat credit as CGST Credit. He can also take unavailed Cenvat credit of excise duty paid on 
capital goods - section 140(1) and 140(2) of CGST Act. He has to submit application in form GST 
TRAN 1 within 60 days. 
?   A dealer or manufacturer who has input tax credit under State Vat or Entry Tax in his return on 30- 
6-2017 can carry forward his input tax credit as SGST Credit. He can also take unavailed credit of 
State Vat paid on capital goods - section 140(1) and 140(2) of SGST Act. He has to submit 
application in form GST TRAN 1 within 60 days. 
?   If goods were supplied under CST Act, details of claims and CST forms (C, F, H, I, E-I/E-II shall 
be submitted within 60 days - proviso to rule 1(1) of Transitional Provision Rules. It seems the 
provision is for those availing State incentives of refund of CST, since otherwise, input tax credit of 
Central Sales Tax (CST) is not admissible. 
?   A taxable person who was not eligible to take Cenvat Credit but is now under GST can take input 
tax credit of excise duty which was paid on the stock with him, if he has Invoice or other documents 
evidencing payment of excise duty. He has to submit stock statement - section 140(3) of CGST Act. 
?   A taxable person who was not earlier under Central Excise but is now under GST and does not 
have excise duty paying documents evidencing payment of excise duty, can take input tax credit of 
40% of CGST payable by him. He takes credit when he sales this stock after 1-7-2017 by charging 
CGST.  He can sale old stock  upto six months.  He has to submit stock  statement  and submit 
statement in form GST TRAN - - proviso to section 140(3) of CGST Act. 
?   A taxable person who was not earlier under State Vat but is now under GST can take input tax 
credit of State Vat which was paid on the stock with him, if he has tax invoices or other documents 
evidencing payment of State Vat. He has to submit stock statement - section 140(3) of SGST Act. 
?   A taxable person who was not earlier under State Vat or was under composition scheme but is now 
under GST and does not have documents evidencing payment of State Vat, can take input tax credit 
of 40% of SGST payable by him. He takes credit when he sales this stock after 1-7-2017 by 
charging SGST. He can sale old stock upto six months. He has to submit stock statement and submit 
statement in form GST TRAN - - proviso to section 140(3) of SGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
?   If goods were cleared by supplier prior to 1-7-2017 by paying excise duty and State Vat but goods 
were received after 1-7-2017  by recipient,  input tax credit of such excise duty or State Vat is 
available if such invoice was recorded in books of account within 30 days i.e. before 30-7-2017. He 
has to furnish specified details - section 140(5) of CGST Act and SGST Act. 
?   If material was sent for job work and was lying with job worker, input tax credit can be taken on 
submission of details - section 141 of CGST Act and SGST Act. 
?   If goods were sent on approval basis and were not with the taxable person on 1-07-2017, details 
are to be submitted in form GST TRAN-1. 
42.1 Transition of persons registered under excise, State  Vat or service tax 
 
Taxable Persons who are paying service tax, State Vat or Central Excise are required to migrate to GST. 
They will get temporary PAN based registration number. Final registration will be granted after submitting 
necessary information and papers - section 139 of CGST Act. 
Most of the existing taxable persons have already migrated to GST Registration, even if GST Law is not yet 
made effective. 
See procedure in the chapter 'Basic Procedures in GST'. 
 
42.2 Input Tax Credit while Switching  over from existing tax structure to GST 
 
The provisions are summarized below. 
 
42.2-1 Eligible Cenvat  Credit carried forward 
 
Eligible Cenvat credit on inputs and input services can be carried forward - section 140(1) of CGST Act. 
Unavailed Cenvat Credit on eligible capital goods not carried forward in a return can taken - section 140(2) of 
CGST Act. 
 
The manufacturer has to submit application in form GST TRAN 1 within 60 days - rule 1(1) of Transitional 
Provisions. 
 
As per section 140 of CGST Act, such carry forward is automatic. However, the rule uses the word 'apply'. 
This implies that such carry forward is not automatic and permission is required. 
42.2-2 Eligible State  Vat Credit and entry tax carried forward 
 
Eligible State Vat credit and entry tax credit can be carried forward - section 140(1) of SGST Act. 
 
Unavailed State Vat Credit and entry tax credit on eligible capital goods not carried forward in a return can 
taken - section 140(2) of SGST Act. 
He has to submit application in form GST TRAN 1 within 60 days - rule 1(1) of Transitional Provisions. 
 
Details of sales under CST Act - If goods were supplied under CST Act, details of claims and CST forms 
(C, F, H, I, E-I/E-II shall be submitted within 60 days - proviso to rule 1(1) of Transitional Provision Rules. 
 
It seems the provision is for those availing State incentives of ref und of CST, since otherwise, input tax credit 
of Central Sales Tax (CST) is not admissible. 
42.2-3 Eligible  duties  and taxes  on goods which were held in stock on appointed day, if person was 
not eligible to take  Cenvat  credit or Vat credit earlier 
A registered  person who  was not liable  to be registered  under earlier  law or who  was engaged  in the 
manufacture  of exempted  goods or provision of exempted  service or who was providing works contract 
service and paying service tax under abatement scheme under Notification No. 26/2012-ST dated 20-6-2012 
or first stage dealer or second stage dealer or a registered importer or a depot of a manufacturer, shall be 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
entitled to take credit in his electronic cash register of eligible duties in respect of inputs in stock and inputs 
contained in semi-finished or finished goods lying in stock. There should be duty paying document with him 
which are not more than 12 month old. The supplier of service should not be eligible for any abatement under 
CGST Act - section 140(3) of CGST Act and section 140(3) of SGST Act. 
A taxable person who was not eligible to take Cenvat Credit but is now under GST can take input tax credit 
of excise duty which was paid on the stock with him, if he has Invoice or other documents evidencing payment 
of excise duty. 
A taxable person who was not earlier under State Vat but is now under GST can take input tax credit of State 
Vat which was paid on the stock with him, if he has tax invoices or other documents evidencing payment of 
State Vat. He has to submit stock statement - section 140(3) of SGST Act. 
He has to submit stock statement in prescribed form. 
 
42.2-4  Deemed  Input tax  credit of tax  on  stock  if invoice  of supplier showing  tax  paid  is  not 
available 
Even if duty paying document is not available, input tax credit will be available on goods held in stock on 1-7- 
2017, at such rates and in such manner as may be prescribed - proviso to section 140(3) of CGST Act and 
section 140(3) of CGST Act. 
As per rule 1(3) of Transitional Provisions Rules, he can take input tax credit of 40% of his sale price, at the 
time of making sale. He can make sale within six months after 1-7-2017. 
The provisions of rule 1(3) are as follows : 
 
Deemed input tax credit of excise duty on goods in stock - A taxable person who was not earlier under 
Central Excise but is now under GST and does not have excise duty paying documents evidencing payment of 
excise duty, can take input tax credit of 40% of CGST payable by him. He takes credit when he sales this 
stock after 1-7-2017 by charging CGST. He can sale old stock upto six months. He has to submit stock 
statement and submit statement in form GST TRAN within 60 days. 
Deemed input  tax credit of State Vat on goods in stock - A taxable person who was not earlier under 
State Vat or was under composition scheme but is now under GST and does not have documents evidencing 
payment of State Vat, can take input tax credit of 40% of SGST payable by him. He takes credit when he 
sales this stock after 1-7-2017 by charging SGST. He can sale old stock upto six months. He has to submit 
stock statement and submit statement in form GST TRAN within 60 days. 
42.2-5 Credit if taxable  person was manufacturing exempted as well as taxable  goods and providing 
exempted or taxable  services 
A taxable person who was manufacturing exempted as we l as taxable goods and providing exempted or 
taxable services can take input tax credit of Cenvat credit as per return f iled under excise law, if he is liable to 
pay CGST and SGST. He can also take input tax credit of duty and Vat paid on inputs held in stock and 
inputs contained in semi-finished goods or finished goods held in stock on 1-7-2017 relating to such exempted 
goods or tax free goods- - section 140(4) of CGST Act and section 140(4) of SGST Act. 
42.2-6 Credit of duty  paid  inputs  or service  tax paid  on input  services  received after 1-7-2017 but 
duty was paid earlier 
Credit of duty paid inputs or service tax paid on input services received after 1-7-2017 but duty was paid 
prior to 1-7-2017 will be available if document was recorded in books of account within 30 days. This period 
of 30 days can be extended by Commissioner by further 30 days - section 140(5) of CGST Act. 
Similar provision in respect of Vat paid on goods which were received after 1-7-2017 - section 140(5) of 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
SGST Act. 
 
The taxable person is required to submit details as specified in rule 1(2)(c) of Transitory Provision Rules within 
sixty days. 
42.2-7 Registered person who was paying tax/duty at fixed rate or paying fixed amount 
 
Registered person who was paying tax/duty at fixed rate or paying fixed amount under earlier law can take 
input tax credit of excise duty paid VAT in on inputs held in stock or contained in semi-finished goods and 
finished goods - section 140(6) of CGST Act and section 140(6) of SGST Act. 
Details of stock are required to be submitted within sixty days - rule 1(2)(b) of Transitory Provisions Rules. 
 
42.2-8 Distribution of credit by Input service distributor of service invoices received after GST 
 
Input service distributor can distribute credit in respect of services received prior to GST, even if invoices of 
such services were received after introduction of GST - section 140(7) of CGST Act. 
42.2-9 Taxable persons having centralized registration under service tax 
 
Taxable persons having centralized registration under service tax can take input tax credit within three months 
if included in his return. The credit can be distributed to its branches or divisions having same income tax PAN 
- section 140(8) of CGST Act. 
 
42.3 Inputs, semi finished  goods  and  finished  goods  sent outside  for job work before 1-7-2017 but 
received after 1-7-2017 
A taxable person might have sent Inputs, semi finished goods and finished goods outside before 1-7-2017 for 
job work or testing. If these are received back before 31-12-2017, GST will not be payable - section 141 of 
CGST Act and section 141 of SGST Act. 
If material was sent for job work and was lying with job worker, input tax credit can be taken on submission 
of details - rule 3 of Transitional Provisions Rules. 
42.4 Inputs sent outside  on approval basis as on 1-7-2017 
 
If goods were sent on approval basis and were not with the taxable person on 1-07-2017, details are to be 
submitted in form GST TRAN-1 - rule 4 of Transitional Provisions Rules.