Section 18.
Availability of credit in special circumstances.-
(1) Subject to such
conditions and restrictions as may be prescribed-
(a) a person who has
applied for registration under this Act within thirty days from the date on
which he becomes liable to registration and has been granted such registration
shall 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;
(b) a person who
takes registration under sub-section (3) of section 25 shall 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;
(c) where any
registered person ceases to pay tax under section 10, he shall 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:
Provided that the
credit on capital goods shall be reduced by such percentage points as may be
prescribed;
(d) where an exempt
supply of goods or services or both by a registered person becomes a taxable
supply, such person shall 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.
(2) A registered
person shall not be entitled to take input tax credit under sub-section (1) in
respect of any supply of goods or services or both to him after the expiry of
one year from the date of issue of tax invoice relating to such supply.
(3) Where there is a
change in the constitution of a registered person on account of sale, merger,
demerger, amalgamation, lease or transfer of the business with the specific
provisions for transfer of liabilities, the said registered person shall be
allowed to transfer the input tax credit which remains unutilised in his
electronic credit ledger to such sold, merged, demerged, amalgamated, leased or
transferred business in such manner as may be prescribed.
(4) Where any
registered person who has availed of input tax credit opts to pay tax under
section 10 or, where the goods or services or both supplied by him become
wholly exempt, he shall pay an amount, by way of debit in the electronic credit
ledger or electronic 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
exercising of such option 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.
(5) The amount of
credit under sub-section (1) and the amount payable under sub-section (4) shall
be calculated in such manner as may be prescribed.
(6) In case of supply
of capital goods or plant and machinery, on which input tax credit has been
taken, the registered person shall pay an amount equal to the input tax credit
taken on the said capital goods or plant and machinery reduced by such
percentage points as may be prescribed or the tax on the transaction value of
such capital goods or plant and machinery determined under section 15,
whichever is higher:
Provided 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
determined under section 15.
