Input tax on imports
This query is : Resolved
09 August 2017
I am a machine trader. I have some old stock of machines imported in December 2016. My company was not excise registered as the turnover was below limit.
I have paid excise on the imported machine in December 2016 and planning to sell the machine now in August 2017.
Can I avail the input tax credit of the excise paid during imports so that I can sell the Machines at lower rates by taking input tax credit and applying GST on the same
Waiting for your reply
I have paid excise on the imported machine in December 2016 and planning to sell the machine now in August 2017.
Can I avail the input tax credit of the excise paid during imports so that I can sell the Machines at lower rates by taking input tax credit and applying GST on the same
Waiting for your reply
09 August 2017
As per the transitional provisions of the act you are eligible for Input credit of CVD paid by contained in opening stock as on 1st July 2017.
N. Jain group.blr@gmail.com
N. Jain group.blr@gmail.com
09 August 2017
Dear Sir can you elaborate in simple words as I am unable to understand if the answer is yes or no
01 August 2024
To address your query on availing input tax credit (ITC) for excise paid on imported machines, here are the key points:
### 1. **Excise Duty and Input Tax Credit:**
- **Excise Duty (Pre-GST Era):** Under the pre-GST regime, excise duty was applicable on the manufacturing of goods, and input tax credit on excise was typically available to manufacturers and service providers. However, as you mentioned, your company was not registered under excise duty.
- **Input Credit on Imports:** Input tax credit for excise duty on imported goods was generally available if the goods were used for further manufacturing or taxable activities. However, in your case, since the turnover was below the registration limit, and you did not have an excise registration, claiming this credit might not have been permissible.
### 2. **Transition to GST Regime:**
- **GST Implementation:** With the implementation of GST on July 1, 2017, the framework for input tax credit changed significantly. Under GST, input tax credit is available on the taxes paid on inputs (including imports) used to supply taxable goods or services.
- **Input Tax Credit on Old Stock:** For stocks purchased and excise duty paid before GST implementation, you may need to follow specific procedures to claim the transition credit:
- **CENVAT Credit Transfer:** Under the transitional provisions of GST, there was an opportunity to claim credit for the excise duty (and VAT) paid on stock held on the transition date. This is done through the "Transitional Credit" mechanism.
- **Claiming ITC on Old Stock:**
- **No Excise Registration:** Since your company was not excise registered, claiming the credit on the old stock may be problematic.
- **GST Applicability:** For GST purposes, you can claim input tax credit for GST paid on purchases after the implementation of GST. For stock purchased before GST, the transition rules would apply if excise credit was not previously availed.
### 3. **Steps to Follow:**
- **Verify Eligibility:** Check whether you can claim transitional credit for the old stock of machines based on the GST transitional provisions. This usually involves ensuring that excise duty was properly documented and that you were eligible to carry forward such credit.
- **Document Compliance:** Ensure you have proper documentation of the excise duty paid on the machines and that this is in accordance with the GST transition provisions.
- **Consult GST Provisions:** Review the specific GST provisions and notifications related to transitional credit for old stock. This will guide you on the procedures to follow and whether any special conditions apply.
- **Consult a Tax Professional:** Given the complexities involved, consulting a tax professional or GST consultant can provide precise guidance tailored to your situation.
### Summary:
- **Excise Credit Pre-GST:** If your company was not registered for excise, claiming input tax credit on excise paid may not have been applicable before GST.
- **GST Transition:** For GST, transitional provisions allow claiming credit for pre-GST stock, but you must comply with specific conditions and documentation requirements.
- **Current GST Credit:** You can claim input tax credit for GST paid on purchases after the GST implementation, provided the purchases are used for taxable supplies.
Ensure to review the relevant GST notifications and consult a tax advisor to handle your specific case effectively.
### 1. **Excise Duty and Input Tax Credit:**
- **Excise Duty (Pre-GST Era):** Under the pre-GST regime, excise duty was applicable on the manufacturing of goods, and input tax credit on excise was typically available to manufacturers and service providers. However, as you mentioned, your company was not registered under excise duty.
- **Input Credit on Imports:** Input tax credit for excise duty on imported goods was generally available if the goods were used for further manufacturing or taxable activities. However, in your case, since the turnover was below the registration limit, and you did not have an excise registration, claiming this credit might not have been permissible.
### 2. **Transition to GST Regime:**
- **GST Implementation:** With the implementation of GST on July 1, 2017, the framework for input tax credit changed significantly. Under GST, input tax credit is available on the taxes paid on inputs (including imports) used to supply taxable goods or services.
- **Input Tax Credit on Old Stock:** For stocks purchased and excise duty paid before GST implementation, you may need to follow specific procedures to claim the transition credit:
- **CENVAT Credit Transfer:** Under the transitional provisions of GST, there was an opportunity to claim credit for the excise duty (and VAT) paid on stock held on the transition date. This is done through the "Transitional Credit" mechanism.
- **Claiming ITC on Old Stock:**
- **No Excise Registration:** Since your company was not excise registered, claiming the credit on the old stock may be problematic.
- **GST Applicability:** For GST purposes, you can claim input tax credit for GST paid on purchases after the implementation of GST. For stock purchased before GST, the transition rules would apply if excise credit was not previously availed.
### 3. **Steps to Follow:**
- **Verify Eligibility:** Check whether you can claim transitional credit for the old stock of machines based on the GST transitional provisions. This usually involves ensuring that excise duty was properly documented and that you were eligible to carry forward such credit.
- **Document Compliance:** Ensure you have proper documentation of the excise duty paid on the machines and that this is in accordance with the GST transition provisions.
- **Consult GST Provisions:** Review the specific GST provisions and notifications related to transitional credit for old stock. This will guide you on the procedures to follow and whether any special conditions apply.
- **Consult a Tax Professional:** Given the complexities involved, consulting a tax professional or GST consultant can provide precise guidance tailored to your situation.
### Summary:
- **Excise Credit Pre-GST:** If your company was not registered for excise, claiming input tax credit on excise paid may not have been applicable before GST.
- **GST Transition:** For GST, transitional provisions allow claiming credit for pre-GST stock, but you must comply with specific conditions and documentation requirements.
- **Current GST Credit:** You can claim input tax credit for GST paid on purchases after the GST implementation, provided the purchases are used for taxable supplies.
Ensure to review the relevant GST notifications and consult a tax advisor to handle your specific case effectively.
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