Carry forward of canvat and input credit on capital goods

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This query is : Resolved

Sanjeev Agarwal (Querist)

13 May 2017 One of my client is establishing a plant for processing of mineral. The plant will start commercial production only after 01st of July 2017. Currently they are procuring and installing Capital Goods. As per my knowledge there is no excise duty on processing of minerals.

My query is whether to take credit of excise duty and CST paid as CENVAT and Input Credit of CST and carry forward the same into GST so that the assessee can take credit of CENVAT and CST into GST? Will it be possible to take credit of CENVAT and CST in GST? Let me tell you that the machines shall be purchased from out of state of Rajasthan.

CA Altamush Zafar

CA Altamush Zafar (Expert)

15 May 2017 Credits of CST is not available as per present law therefore that will be your cost. As per transition provisions of GST you can take credits of capital goods only if you have availed 50% already otherwise it is not available. It is advisable to take registration in excise and take half credits of capital goods then only you can take the other half.

CA Altamush Zafar

CA Altamush Zafar (Expert)

15 May 2017 In reference to above comment i would like to correct that as you are exempt from excise duty even credits of capital goods will not be available. You can only take credits of inputs in stock in hand, inputs contained in semi finished and finished goods as held on appointed subject to such other conditions.

Sanjeev Agarwal

Sanjeev Agarwal (Querist)

17 May 2017 Thanks for the response.

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