Section 140. Transitional arrangements for input tax
credit.-
(1) A registered person, other than a person opting to
pay tax under section 10, shall be entitled to take, in his electronic credit
ledger, the amount of CENVAT credit 1[of eligible duties] carried forward in
the return relating to the period ending with the day immediately preceding the
appointed day, furnished by him under the existing law 2[within such time and]
in such manner as may be prescribed:
Provided that the registered person shall not be
allowed to take credit in the following circumstances, namely:-
(i) where the said amount of credit is not admissible
as input tax credit under this Act; or
(ii) where he has not furnished all the returns
required under the existing law for the period of six months immediately
preceding the appointed date; or
(iii) where the said amount of credit relates to goods
manufactured and cleared under such exemption notifications as are notified by
the Government.
(2) A registered person, other than a person opting to
pay tax under section 10, shall be entitled to take, in his electronic credit
ledger, credit of the unavailed CENVAT credit in respect of capital goods, not
carried forward in a return, furnished under the existing law by him, for the
period ending with the day immediately preceding the appointed day 2[within
such time and] in such manner as may be prescribed:
Provided that the registered person shall not be
allowed to take credit unless the said credit was admissible as CENVAT credit
under the existing law and is also admissible as input tax credit under this
Act.
Explanation.- For the purposes of this sub-section,
the expression "unavailed CENVAT credit" means the amount that
remains after subtracting the amount of CENVAT credit already availed in
respect of capital goods by the taxable person under the existing law from the
aggregate amount of CENVAT credit to which the said person was entitled in
respect of the said capital goods under the existing law.
(3) A registered person, who was not liable to be
registered under the existing law, or who was engaged in the manufacture of
exempted goods or provision of exempted services, or who was providing works
contract service and was availing of the benefit of notification No.
26/2012-Service Tax, dated the 20th June, 2012 or a first stage dealer or a
second stage dealer or a registered importer or a depot of a manufacturer,
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 4[goods held in stock on the appointed day, within such time and in
such manner as may be prescribed, 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 eligible for input
tax credit on such inputs under this Act;
(iii) the said registered person is in possession of
invoice or other prescribed documents evidencing payment of duty under the
existing law in respect of such inputs;
(iv) such invoices or other prescribed documents were
issued not earlier than twelve months immediately preceding the appointed day;
and
(v) the supplier of services is not eligible for any
abatement under this Act:
Provided that where a registered person, other than a
manufacturer or a supplier of services, is not in possession of an invoice or
any other documents evidencing payment of duty in respect of inputs, then, such
registered person shall, subject to such conditions, limitations and safeguards
as may be prescribed, including that the said taxable person shall pass on the
benefit of such credit by way of reduced prices to the recipient, be allowed to
take credit at such rate and in such manner as may be prescribed.
(4) A registered person, who was engaged in the
manufacture of taxable as well as exempted goods under the Central Excise Act,
1944 (1 of 1944) or provision of taxable as well as exempted services under
Chapter V of the Finance Act, 1994 (32 of 1994), but which are liable to tax
under this Act, shall be entitled to take, in his electronic credit ledger,-
(a) the amount of CENVAT credit carried forward in a
return furnished under the existing law by him in accordance with the
provisions of sub-section (1); and
(b) the amount of CENVAT 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, relating to such exempted
goods or services, in accordance with the provisions of sub-section (3).
(5) A registered person shall be entitled to take, in
his electronic credit ledger, credit of eligible duties and taxes in respect of
inputs or input services received on or after the appointed day but the duty or
tax in respect of which has been paid by the supplier under the 5[existing law,
within such time and in such manner as may be prescribed,] subject to the
condition that the invoice or any other duty or tax paying document of the same
was recorded in the books of account of such person within a period of thirty
days from the appointed day:
Provided that the period of thirty days may, on
sufficient cause being shown, be extended by the Commissioner for a further
period not exceeding thirty days:
Provided further that said registered person shall
furnish a statement, in such manner as may be prescribed, in respect of credit
that has been taken under this subsection.
(6) 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 6[goods held in stock on the appointed day, within
such time and in such manner as may be prescribed, 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; and
(v) such invoices or other prescribed documents were
issued not earlier than twelve months immediately preceding the appointed day.
(7) Notwithstanding anything to the contrary contained
in this Act, the input tax credit on account of any services received prior to
the appointed day by an Input Service Distributor shall be eligible for
distribution as 7[credit under this Act, within such time and in such manner as
may be prescribed, even if] the invoices relating to such services are received
on or after the appointed day.
(8) Where a registered person having centralised
registration under the existing law has obtained a registration under this Act,
such person shall be allowed to take, in his electronic credit ledger, credit
of the amount of CENVAT credit carried forward in a return, furnished under the
existing law by him, in respect of the period ending with the day immediately
preceding the appointed day 8[within such time and in such manner] as may be
prescribed:
Provided that if the registered person furnishes his
return for the period ending with the day immediately preceding the appointed
day within three months of the appointed day, such credit shall be allowed
subject to the condition that the said return is either an original return or a
revised return where the credit has been reduced from that claimed earlier:
Provided further that the registered person shall not
be allowed to take credit unless the said amount is admissible as input tax
credit under this Act:
Provided also that such credit may be transferred to
any of the registered persons having the same Permanent Account Number for
which the centralised registration was obtained under the existing law.
(9) Where any CENVAT credit availed for the input
services provided under the existing law has been reversed due to non-payment
of the consideration within a period of three months, such 9[credit can be
reclaimed, within such time and in such manner as may be prescribed, subject
to] the condition that the registered person has made the payment of the
consideration for that supply of services within a period of three months from
the appointed day.
(10) The amount of credit under sub-sections (3), (4)
and (6) shall be calculated in such manner as may be prescribed.
Explanation 1. -For the purposes of 10[sub-sections
(1), (3), (4)] and (6), the expression "eligible duties" means-
(i) the additional duty of excise leviable under
section 3 of the Additional Duties of Excise (Goods of Special Importance) Act,
1957 (58 of 1957);
(ii) the additional duty leviable under sub-section
(1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975);
(iii) the additional duty leviable under sub-section
(5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975);
(iv) 11[****];
(v) the duty of excise specified in the First Schedule
to the Central Excise Tariff Act, 1985 (5 of 1986);
(vi) the duty of excise specified in the Second
Schedule to the Central Excise Tariff Act, 1985 (5 of 1986); and
(vii) the National Calamity Contingent Duty leviable
under section 136 of the Finance Act, 2001 (14 of 2001),
in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the appointed
day.
Explanation 2.-For the purposes of 10[sub-sections (1)
and (5)], the expression "eligible duties and taxes" means-
(i) the additional duty of excise leviable under
section 3 of the Additional Duties of Excise (Goods of Special Importance) Act,
1957 (58 of 1957);
(ii) the additional duty leviable under sub-section
(1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975);
(iii) the additional duty leviable under sub-section
(5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975);
(iv) 11[****];
(v) the duty of excise specified in the First Schedule
to the Central Excise Tariff Act, 1985;
(vi) the duty of excise specified in the Second
Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);
(vii) the National Calamity Contingent Duty leviable
under section 136 of the Finance Act, 2001 (14 of 2001); and
(viii) the service tax leviable under section 66B of
the Finance Act, 1994 (32 of 1994),
in respect of inputs and input services received on or
after the appointed day.
12[Explanation 3.- For removal of doubts, it is hereby
clarified that the expression "eligible duties and taxes" excludes
any cess which has not been specified in Explanation 1 or Explanation 2 and any
cess which is collected as additional duty of customs under sub-section (1) of
section 3 of the Customs Tariff Act, 1975 (51 of 1975).]
