Availability of Input Tax Credit in Special Cases [Section 18]

  • A person who has applied for registration within 30 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.
  • A person who takes registration under section 25(3) 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
  • Any Registered person ceases to pay tax under section 10, 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.

  • 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.

CasePersons eligibleGoods entitled as onConditions
1A person who has applied forregistration within 30 days from thethe date on which he becomes liable toregistration, and has been grantedsuch registrationHe can claim the ITC on inputs held in the form of Raw Materials / WIP/ Finished Goods as on the day immediately preceding the date from which he becomes liable to pay tax.ITC must be availed within1 year from the date ofissue of tax invoice by thesupplier
2A person who isn’t liable to registerper se, but obtains voluntaryregistrationHe can claim the ITC on inputs held in the form of Raw Materials/WIP/ Finished Goods as on the day immediately preceding the date ofregistrationITC must be availed within1 year from the date ofissue of tax invoice by thesupplier
3A registered person who ceasesto be under composition levy andswitches to the regular schemeHe can claim the ITC on inputs held in the form of Raw Materials/WIP / Finished Goods & capital goods as on the day immediately preceding the date from which he becomes liable to pay tax under theregular schemeITC on Capital Goodswill be reduced by 5%per quarter of year/partthereof of usage from theDate of the invoice.
4Registered person whose exemptsupplies become taxableHe can claim the ITC on inputs held in the form of Raw Materials/WIP/Finished Goods & Capital Goods relatable to such exempt supply as on the day immediately precedingthe date from which the supply becomes taxableITC on Capital Goodswill be reduced by 5%per quarter of year/partthereof of usage from thedate of the invoice.

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