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Allowable Credit of Central Duties in respect of stock as on 1st July

CA Rishi Goyal 
on 06 June 2017


Following persons are entitled to take credit:

1. Not liable to register under earlier law
2. Was engaged in manufacturing exempted goods or providing exempted services
3. Availed the benefit of 26/2012
4. FSD/SSD/Registered Importer

Conditions for taking credit:

1. Input i.e. Stock to be used taxable supply in CGST
2. Taxpayer is eligible for ITC in CGST
3. Possession of invoice evidencing payment of duties.
4. Invoice should not issue earlier than 12 months i.e. 01.07.16.
5. Supplier of services is not eligible for any abatement under CGST.

** If trader has no invoice as stated in point 3 then credit shall be allowed at the rate of 40% of the central tax i.e. CGST applicable after the appointed date i.e. 01.07.17 subject to following conditions

1. Such goods should not wholly exempt from excise duty.
2. Taxpayer has invoice in respect of procurement of goods.

Credit of the following duties will be allowed:

1. Excise Duty as per schedule I & II of CETA, 1985.
2. Countervailing duty as per Custom Act i.e. under section 3(1) or 3(5) of CTA, 1975.
3. AED as per AED (Textile & Textile Articles) Act, 1978.
4. AED as per AED (Goods of special Importance) Act, 1957.
5. National Calamity Contingent Duty as per Finance Act, 2001.

Other Important points:      

1. Benefit not available in respect of input services.
2. It is must be noted that credit can be availed as CGST credit not SGST credit.
3. This Credit is in addition to normal Cenvat Credit in respect of duties allowed under section 140(1).

The author is a practicing Chartered Accountant in Delhi and can also be reached at

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