Amended transitional arrangements for ITC notified u/s 140 of CGST act



Quick Summary
The Central Board of Indirect Taxes and Customs has notified amended provisions concerning transitional arrangements for Input Tax Credit (ITC) under Section 140 of the CGST Act. These changes, effective from 18th May 2020, clarify the conditions and procedures for registered persons to claim carried-forward CENVAT credit. The amendments aim to provide a smoother transition for businesses by addressing various scenarios, including unavailed credit on capital goods and credit for inputs held in stock.

• CBDT HAS NOTIFIED PROVISIONS U/S TRANSITIONAL ARRANGEMENTS FOR ITC

• The Transitional credit for un-availed CENVAT-  Amended provisions will be effective from 18.05.2020

ITC Transitional Arrangements Amended Under CGST Act

Central Board of Indirect Taxes and Customs, Ministry of Finance, (Department of Revenue)vide Notification No. 43/2020 – Central Tax dated 16th May, 2020 has issued notification which Seeks to bring into force Section 128 of Finance Act, 2020 in order to bring amendment in Section 140 of CGST Act w.e.f. 01.07.2017.

Key Analysis:

   

Before Amendment

After Amendment (Section 128 of Finance Act, 2020)

(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 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 in such manner as may be prescribed:

(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 carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the " within such time and" in such manner as may be prescribed:

(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 dayin such manner as may be prescribed:

(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 "within such time and"in such manner as may be prescribed:

(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 goods held in stock on the appointed day subject to the following conditions, namely:-

(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   "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:-

(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 existing law, 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:

(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 "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:

(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 goods held in stock on the appointed day subject to the following conditions, namely:-

(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 goods held in stock on the appointed day, within such time and in such manner as may be prescribed, subject to subject to the following conditions, namely:-

(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 credit under this Act even if the invoices relating to such services are received on or after 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 "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 in such manner as may be prescribed:

(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 "within such time and in such manner" as may be prescribed:

(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 credit can be reclaimed subject tothe 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.

(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 "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.

 
 

Amended Provisions notified on 16th May and shall came into force w.e.f. 18th May 2020.

Link: Click Here


8358 Views Comment   Share GST   Report


About the Author

Company Secretary

Company Secretary having 8+ years of post qualification experience in the Compliance Management Services industry by serving Corporates including Listed Companies, Corporate Secretarial Firms and LLP. Have a keen interest in the Corporate Governance and Compliance Management and the soaring craving to learn everyday. A ... Read more

Comments :

Related Articles


Loading


Popular Articles





CCI Pro

CCI Articles

submit article


Company
ARTICLESHIP 26 August 2026
Article Assistant

ANIVESH CONSULTANTS LLP

Gurgaon

CA Inter

View Details
Company
06 August 2026
Sr accounts executive, Asst Manager

JAMNA AUTO INDUSTRIES LTD

Jamshedpur

CA Inter

View Details
Company
21 August 2026
Accountant

A G International

Kolkata

B.Com

View Details
Company
Featured 19 August 2026
Chartered Accountant

apricus india

Pune

CA

View Details
Company
07 August 2026
Chartered Accountant

Devesh Garg and co

New Delhi

CA

View Details
Company
ARTICLESHIP 17 August 2026
CA Article Trainee

ASC Group

Noida

CA Inter

View Details
Company
21 August 2026
Finance Manager

Resollect Technologies Pvt Ltd

Mumbai

CA

View Details
Company
12 August 2026
Deputy Manager - Finance

RoamPrime Technologies Private Limited

Bengaluru

CA

View Details