EXAMPLE-116
M/s
XYZ is toy manufacturing company;
his aggregate turnover in the preceding financial year 2016-17 is Rs. 38 lakh
working under composition scheme. In
current year on 24th December,
2017 the turnover of firm exceeds Rs. 75 lakh and he become a regular registered
taxable person.
Following inputs on which tax is paid under GST held in stock as on 23rd
December, 2017 are as follows:-
(a)
Raw material stock worth of Rs 500000 and GST paid on it Rs 75000
(b)
Input contained in Semi finished stock
worth of Rs 400000 on which GST paid of Rs. 60000
(c)
Input contained in finished goods is of Rs 200000, tax paid on which is Rs
30000.
Determine the eligibility of taking credit on input held in
stock.
Answer
Section
18(1)(c) provides that If registered taxable person ceases to pay tax under
section 10, 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 9.
When in the
above mentioned circumstances registered person eligible for claim credit in
respect of Input held in stock on the above prescribed dates.
Person also eligible for credit on capital goods; when opting out
from composition scheme.
The registered
person eligible for claiming credit on input or capital goods as per section
18(1) shall make a declaration, electronically on the common portal in FORM GST
ITC-01 with in 30 days from the
date becoming eligible for ITC as per this section. This form contains the
details relating to the inputs lying in stock or whether in semi finished or
finished stock or as the case may be capital goods.
Note:- It is assumed that input invoice is not older than 1 year.