The treatment would depend on the nature of registration of the organisation under the present laws. In an attempt to bring clarity on this issue, an analysis is made in this article on case study basis.
The following analysis is based on the assumption that GST will be effective from 1st July 2017.The discussion is only in respect of inputs and input services and not capital goods.The discussion does not cover VAT dealers paying tax under MRP Scheme.
Treatment of Stock in hand under GST
Case 1: Manufacturer registered under Excise, VAT and Service Tax
Return filed under Excise, VAT or Service Tax shows outstanding/ excess/ unutilised balance of input tax credit
The excess input tax credit reflected in the return filed for period ended 30th June 2017 to be carried forward under GSTGST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit to be carried forwardExcess CENVAT Credit (shown in Excise and Service Tax Return) shall be carried forward as CGSTExcess VAT Credit (shown in VAT Return) shall be carried forward as SGST
The balance is not allowed to be carried forward in following cases:
The Credit is not admissible in the GST LawAll returns for 6 months have not been duly filed under the Excise, VAT, Service Tax LawCredit relates to goods manufactured and cleared under exemption notifications as are notified by the GovernmentVAT Credit attributable to claims related to sales under Form C, F, E1, E2, H etc. not to be allowed unless the forms are duly made available
Return filed under Excise, VAT and Service Tax does not show outstanding balance of input tax credit Where the entire credit availed has been utilised and no outstanding, excess balance of credit is reflected in the return:
No credit shall be carried forward under GSTNo requirement to file any detail with respect to the stock in GST FORM TRAN-1
Case 2: Manufacturer registered under Excise and VAT
Return filed under Exciseor VAT shows outstanding/ excess/ unutilised balance of input tax credit
The excess input tax credit reflected in the return filed for period ended 30th June2017 to be carried forward under GSTGST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit to be carried forwardExcess CENVAT Credit (shown in Excise Return) shall be carried forward as CGSTExcess VAT Credit (shown in VAT Return) shall be carried forward as SGST
The balance is not allowed to be carried forward in following cases:
The Credit is not admissible in the GST LawAll returns for 6 months have not been duly filed under the Excise and VAT LawCredit relates to goods manufactured and cleared under exemption notifications as are notified by the GovernmentVAT Credit attributable to claims related to sales under Form C, F, E1, E2,H etc. not to be allowed unless the forms are duly made
Return filed under Excise and VAT does not show excess balance of input tax credit Where the entire credit availed has been utilised and no outstanding, excess balance of credit is reflected in the return:
No credit shall be carried forward under GSTNo requirement to file any detail with respect to the stock in GST FORM TRAN-1
Case 3: Manufacturer registered under VAT only
This will cover SSI dealers opting out of excise. This will also cover manufacturers exempt from excise and not registered under excise. Return filed under VAT shows outstanding/ excess/ unutilised balance of input tax credit
The excess input tax credit reflected in the return filed for period ended 30th June 2017 to be carried forward under GSTGST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit to be carried forwardExcess VAT Credit (shown in VAT Return) shall be carried forward as SGST
The balance is not allowed to be carried forward in following cases:
The Credit is not admissible in the GST LawAll returns for 6 months have not been duly filed under the VAT LawCredit attributable to claims related to sales under Form C, F, E1, E2, H etc. not to be allowed unless the forms are duly made available
Return filed under VAT does not show excess balance of input tax credit
No credit shall be carried forward under GST in respect of VAT
Excise duty, Additional Excise Duty, CVD and SAD in respect of raw materials, finished/ semi-finished stock held on 30th June 2017
Credit of Excise and other related duties allowed (subject to few conditions)Duty paying documents/ invoices are essentialDate of issue of such invoice must be on or after 1st July 2016GST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit claimedThe GST FORM TRAN-1 to contain details about the stock held on 30th June 2017Opening Credit as on 1st July 2017 shall be shown as CGST
Case 4: Trader registered under Excise and VAT
This will cover first stage/ second stage dealers Return filed under VAT shows outstanding/ excess/ unutilised balance of input tax credit
The excess input tax credit reflected in the return filed for period ended 30thJune 2017 to be carried forward under GSTGST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit to be carried forwardExcess VAT Credit (shown in VAT Return) shall be carried forward as SGST
The balance is not allowed to be carried forward in following cases:
The Credit is not admissible in the GST LawAll returns for 6 months have not been duly filed under the VAT lawCredit attributable to claims related to sales under Form C, F, E1, E2, H etc. not to be allowed unless the forms are duly made available
Return filed under VAT does not show excess balance of input tax credit
No VAT credit shall be carried forward under GST
Excise duty, Additional Excise Duty, CVD and SAD in respect of raw materials, finished/ semi-finished stock held on 30th June 2017
Credit of Excise and other related duties allowed (subject to few conditions)Duty paying documents/ invoices are essentialDate of issue of such invoice has to be on or after 1st July 2016GST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit claimedThe GST FORM TRAN-1 to contain details about the stock held on 30th June 2017Opening Credit as on 1st July 2017 shall be shown as CGST
Case 5: Trader registered under VAT
Return filed under VAT shows outstanding/ excess/ unutilised balance of input tax credit
The excess input tax credit reflected in the return to be carried forward under GSTGST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit to be carried forwardExcess VAT Credit (shown in VAT Return) shall be carried forward as SGST
The balance is not allowed to be carried forward in following cases:
The Credit is not admissible in the GST LawAll returns for 6 months have not been duly filed under the VAT lawCredit attributable to claims related to sales under Form C, F, E1, E2, H etc. not to be allowed unless the forms are duly made available
Return filed under VAT does not show excess balance of input tax credit
No credit shall be carried forward under GST in respect of VAT
Excise duty, Additional Excise Duty, CVD and SAD in respect of stock held on 30th June 2017 –
Duty paying documents/ invoices are availableCredit of Excise and other related duties allowed (subject to few conditions)Date of issue of such invoice must be on or after 1st July 2016GST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit claimedThe GST FORM TRAN-1 to contain details about the stock held on 30th June 2017Credit shall be carried forward as CGSTDuty paying documents/ invoices are not availableCredit of Excise and other related duties allowed (subject to few conditions)Credit allowed @ 40% of CGST applicable on supply of the stock after 1st July 2017Credit allowed in respect of supplies made till 31st December 2017Documents for procurement of the goods are essentialGoods should not be exempt from excise or nil ratedGST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the stock held on 30th June 2017 Statement containing details of supplies to be submitted each month for 6 months Credit shall be carried forward as CGST
Case 6: Service provider registered under Service Tax paying tax at normal rate
Return filed under Service Tax shows outstanding/ excess/ unutilised balance of input tax credit
The excess input tax credit reflected in the return filed for the period ended 30th June 2017 to be carried forward under GSTGST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit to be carried forwardExcess CENVAT Credit (shown in Service Tax Return) shall be carried forward as CGST
The balance is not allowed to be carried forward in following cases:
The Credit is not admissible in the GST LawAll returns for 6 months have not been duly filed under the Service Tax Law
Return filed under Service Tax does not show excess balance of input tax credit No credit shall be carried forward under GST in respect of Service Tax
Case 7: Manufacturer/ Service provider not registered under any of current laws now registered under GST
Excise duty, Additional Excise Duty, CVD and SAD in respect of raw materials, finished/ semi-finished stock held on 30th June 2017
Credit of Excise and other related duties allowedInputs/ goods should be used to make taxable GST suppliesITC in respect of the inputs should be eligible under GSTDuty paying documents/ invoices are essentialDate of issue of such invoice has to be on or after 1st July 2016GST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit claimedThe GST FORM TRAN-1 to contain details about the stock held on 30th June 2017Credit shall be carried forward as CGST
Case 8: Trader not registered under any of current laws now registered under GST
VAT in respect of raw materials, finished/ semi-finished stock held on 30th June 2017
Credit of VAT allowedInputs/ goods should be used to make taxable GST suppliesITC in respect of the inputs should be eligible under GSTDuty paying documents/ invoices are essentialDate of issue of such invoice must be on or after 1st July 2016GST FORM TRAN-1 to be filed by 29th August 2017The GST FORM TRAN-1 to contain details about the credit claimedThe GST FORM TRAN-1 to contain details about the stock held on 30th June 2017Credit shall be carried forward as SGST
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