ITC availability

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This discussion clarifies Input Tax Credit (ITC) availability when a registered person changes their business nature. Generally, ITC is transferable only upon specific events like sale, merger, or business transfer. However, if all stock of the previous product is sold before changing to a new one, ITC may still be available even if there's no direct link between the old and new business activities.

mulla hussain basha

mulla hussain basha (Querist)

26 March 2020 Dear Experts,

as per the section 18(3) credit will be transferred only on sale, merger, demerger, amalgamation, lease or transfer of business.
if the Registered person changes the nature of business ( from one product to another , ITC will be available or NOT

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

26 March 2020 ITC will be available for change in product if all stocks of that product sold.

CA Suresh Jain

CA Suresh Jain (Expert)

26 March 2020 There is no nexus between inputs and output. The situation does not fall under "transfer of Credit". You are eligible to utilise the credit.

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