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As we apparatus up for the last move - to GST - it ends up plainly vital for everyone of us to be readied. Moving to GST is unavoidable - whether one is a producer, a broker or a specialist co-op.

Online GST solution Provider Registrationwala said as a trader, today one is liable for enrolment or registration under State VAT, if the turnover surpasses the recommended edge restrain or the prescribed threshold limit. One is also liable for registration under Central Excise if you trade in Excisable goods. One is permitted to avail VAT credit and set it off against the yield assess risk. Notwithstanding, the excise duty one pays - won't be accessible as credit, and it will be added to the cost of the item, and in this manner passed on to the purchaser.

In the GST administration, it doesn't make a difference on the off chance that one is a manufacturer, a trader or a service provider. Input charge credit is accessible over the supply network until it achieves the end client.

While going through the above stanzas one might encounter or come up with these questions or may have these inquiries:

• As a trader enrolled under VAT, would I be able to convey forward the closing balance of input tax credit?
• Can I assert Input Tax credit on the end stock on the off chance that I am enrolled under Excise?

To address the above-outlined issues lets comprehend it by taking up a few situations or scenarios;

Situation 1: A merchant enlisted under both VAT and Excise


  1. The closing balance of credit ought to reflect in the last VAT return documented by one.
  2. The credit, as reflecting in the arrival, ought to be permitted as credit under current law.
  3. It ought to likewise be permitted as info assessment credit under GST

The balance credit accessible on the most recent day, proceeding the date on which GST is actualized, can be conveyed forward as input credit to GST.

As a trader enlisted under VAT, would one be able to convey forward the end adjust also referred as input tax credit?

Yes, input VAT is permitted as credit in the present administration and additionally under GST. The information VAT credit sum can be completely conveyed forward as SGST Input Tax Credit.

Could one assert credit on the closing stock in the event that one is registered under Excise?

Excise duty is not permitted as input credit in the present administration. One of the conditions to convey forward the credit on shutting stock is that on transiting to GST, the duty/tax ought to be permitted as credit under the present statute. Today, a first stage or second stage dealer adds the excise duty paid to the cost of the item. It is then sold to a producer, who claims the input credit. In this manner, in the event that you are a dealer enlisted under Excise, you won't be qualified to claim credit on shutting stock.

Situation 2: A dealer who is not enlisted under VAT/CST

One should be enlisted under the VAT/CST administration if the turnover surpasses the specified threshold limit. On the off chance that one is not enrolled under the VAT/CST administration, but rather is obligated for enlistment under GST, one can assert input credit on the off chance that he/she meets the conditions recorded underneath.

  1. The shutting stock held must be utilized or proposed to be utilized for assessable or taxable supplies.
  2. One is qualified for input VAT credit under current law, yet not being obligated for enlistment (turnover was not as much as the enrollment edge confine), one cannot claim input tax credit.
  3. One is qualified for info charge credit under GST

In GST, one is qualified for input VAT credit in the event that one is a standard citizen as it were. In GST, you are eligible for input tax credit if you are a regular tax payer only. A composition taxpayer is not allowed to claim input tax credit.

The date of invoices or any other prescribed duty or tax paying documents must be within 12 months from the date of transitioning to GST.

Situation 3: A trader who is enrolled under VAT, and occupied with the offer of exempted products

On the date of move to GST, if one is a trader who is enrolled under VAT and occupied with offer of exempted goods, yet impose assessable under GST.

Will you be permitted to claim include charge credit?

Yes. One is qualified for convey forward the information VAT credit held in the end stock. One is qualified for information VAT credit under current law, but as a trader engaged in exempted goods, you could not claim input tax credit.  Other eligibility conditions applicable are same as discussed in Scenario 2.

About the Author
Lokesh Sharma is working as a GST Expert with GST.Registrationwala.com, A One Stop Solution for GST Software and other GST Related products


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Lokesh Sharma
Category GST   Report

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