Input Tax Credit Rules under CGST Rules 2017

 

1. Doc­u­men­tary require­ments and con­di­tions for claim­ing input tax cred­it.- (1)The input tax cred­it shall be availed by a reg­is­tered per­son, includ­ing the Input Ser­vice Dis­trib­u­tor, on the basis of any of the fol­low­ing doc­u­ments, namely,-

 

• an invoice issued by the sup­pli­er of goods or ser­vices or both in accor­dance with the pro­vi­sions of sec­tion 31;
• an invoice issued in accor­dance with the pro­vi­sions of clause (f) of sub-sec­tion (3) of sec­tion 31, sub­ject to the pay­ment of tax;
• a deb­it note issued by a sup­pli­er in accor­dance with the pro­vi­sions of sec­tion 34;
• a bill of entry or any sim­i­lar doc­u­ment pre­scribed under the Cus­toms Act, 1962 or rules made there­un­der for the assess­ment of inte­grat­ed tax on imports;
• an Input Ser­vice Dis­trib­u­tor invoice or Input Ser­vice Dis­trib­u­tor cred­it note or any doc­u­ment issued by an Input Ser­vice Dis­trib­u­tor in accor­dance with the pro­vi­sions of sub-rule (1) of rule

 

• Input tax cred­it shall be availed by a reg­is­tered per­son only if all the applic­a­ble par­tic­u­lars as spec­i­fied in the pro­vi­sions of Chap­ter VI are con­tained in the said doc­u­ment, and the rel­e­vant infor­ma­tion, as con­tained in the said doc­u­ment, is fur­nished in FORM GSTR‑2 by such

 

• No input tax cred­it shall be availed by a reg­is­tered per­son in respect of any tax that has been paid in pur­suance of any order where any demand has been con­firmed on account of any fraud, will­ful mis­state­ment or sup­pres­sion of

 

2. Rever­sal of input tax cred­it in the case of non-pay­ment of con­sid­er­a­tion.-(1) A reg­is­tered per­son, who has availed of input tax cred­it on any inward sup­ply of goods or ser­vices or both, but fails to pay to the sup­pli­er there­of, the val­ue of such sup­ply along with the tax payable there­on, with­in the time lim­it spec­i­fied in the sec­ond pro­vi­so to  sub-section

(2) of sec­tion 16, shall fur­nish the details of such sup­ply, the amount of val­ue not paid and the amount of input tax cred­it availed of pro­por­tion­ate to such amount not paid to the sup­pli­er in FORM GSTR‑2 for the month imme­di­ate­ly fol­low­ing the peri­od of one hun­dred and eighty days from the date of the issue of the invoice:

Pro­vid­ed that the val­ue of sup­plies made with­out con­sid­er­a­tion as spec­i­fied in Sched­ule I of the said Act shall be deemed to have been paid for the pur­pos­es of the sec­ond pro­vi­so to sub- sec­tion (2) of sec­tion 16.

 

• The amount of input tax cred­it referred to in sub-rule (1) shall be added to the out­put tax lia­bil­i­ty of the reg­is­tered per­son for the month in which the details are

 

• The reg­is­tered per­son shall be liable to pay inter­est at the rate noti­fied under sub-section

(1) of sec­tion 50 for the peri­od start­ing from the date of avail­ing cred­it on such sup­plies till the date when the amount added to the out­put tax lia­bil­i­ty, as men­tioned in sub-rule (2), is paid.

 

(4) The time lim­it spec­i­fied in sub-sec­tion (4) of sec­tion 16 shall not apply to a claim for re- avail­ing of any cred­it, in accor­dance with the pro­vi­sions of the Act or the pro­vi­sions of this Chap­ter, that had been reversed earlier.

 

3. Claim of cred­it by a bank­ing com­pa­ny or a finan­cial — A bank­ing com­pa­ny or a finan­cial insti­tu­tion, includ­ing a non-bank­ing finan­cial com­pa­ny, engaged in the sup­ply of ser­vices by way of accept­ing deposits or extend­ing loans or advances that choos­es not to com­ply with the pro­vi­sions of sub-sec­tion (2) of sec­tion 17, in accor­dance with the option per­mit­ted under sub-sec­tion (4) of that sec­tion, shall fol­low the fol­low­ing pro­ce­dure, namely,-

 

• the said com­pa­ny or insti­tu­tion shall not avail the cred­it of,- 
  • the tax paid on inputs and input ser­vices that are used for non-busi­ness pur­pos­es; and
  • the cred­it attrib­ut­able to the sup­plies spec­i­fied in sub-sec­tion (5) of sec­tion 17, in FORM GSTR‑2;

 

• the said com­pa­ny or insti­tu­tion shall avail the cred­it of tax paid on inputs and input ser­vices referred to in the sec­ond pro­vi­so to sub-sec­tion (4) of sec­tion 17 and not cov­ered under clause (a);

 

• fifty per cent. of the remain­ing amount of input tax shall be the input tax cred­it admis­si­ble to the com­pa­ny or the insti­tu­tion and shall be fur­nished in FORM GSTR‑2;

 

• the amount referred to in claus­es (b) and © shall, sub­ject to the pro­vi­sions of sec­tions 41, 42 and 43, be cred­it­ed to the elec­tron­ic cred­it ledger of the said com­pa­ny or the institution.

 

 

4. Pro­ce­dure for dis­tri­b­u­tion of input tax cred­it by Input Ser­vice Dis­trib­u­tor.- (1) An Input Ser­vice Dis­trib­u­tor shall dis­trib­ute input tax cred­it in the man­ner and sub­ject to the fol­low­ing con­di­tions, namely,- 
   • the input tax cred­it avail­able for dis­tri­b­u­tion in a month shall be dis­trib­uted in the same month and the details there­of shall be fur­nished in FORM GSTR‑6 in accor­dance with the pro­vi­sions of Chap­ter VIII of these rules;

 

• the Input Ser­vice Dis­trib­u­tor shall, in accor­dance with the pro­vi­sions of clause (d), sep­a­rate­ly dis­trib­ute the amount of inel­i­gi­ble input tax cred­it (inel­i­gi­ble under the pro­vi­sions of sub-sec­tion (5) of sec­tion 17 or oth­er­wise) and the amount of eli­gi­ble input tax credit;

 

• the input tax cred­it on account of cen­tral tax, State tax, Union ter­ri­to­ry tax and inte­grat­ed tax shall be dis­trib­uted sep­a­rate­ly in accor­dance with the pro­vi­sions of clause (d);

 

• the input tax cred­it that is required to be dis­trib­uted in accor­dance with the pro­vi­sions of clause (d) and (e) of sub-sec­tion (2) of sec­tion 20 to one of the recip­i­ents ‘R1’, whether reg­is­tered or not, from amongst the total of all the recip­i­ents to whom input tax cred­it is attrib­ut­able, includ­ing the recipient(s) who are engaged in mak­ing exempt sup­ply, or are oth­er­wise not reg­is­tered for any rea­son, shall be the amount, “C1”, to be cal­cu­lat­ed by apply­ing the fol­low­ing formula -

 

C1 = (t1÷T) × C

 

where,

“C” is the amount of cred­it to be distributed,

 

“t1” is the turnover, as referred to in sec­tion 20, of per­son R1 dur­ing the rel­e­vant peri­od, and

“T” is the aggre­gate of the turnover, dur­ing the rel­e­vant peri­od, of all recip­i­ents to whom the input ser­vice is attrib­ut­able in accor­dance with the pro­vi­sions of sec­tion 20;

 

 

• the input tax cred­it on account of inte­grat­ed tax shall be dis­trib­uted as input tax cred­it of inte­grat­ed tax to every recipient;

 

• the input tax cred­it on account of cen­tral tax and State tax or Union ter­ri­to­ry tax shall- 
  • in respect of a recip­i­ent locat­ed in the same State or Union ter­ri­to­ry in which the Input Ser­vice Dis­trib­u­tor is locat­ed, be dis­trib­uted as input tax cred­it of cen­tral tax and State tax or Union ter­ri­to­ry tax respectively;

 

• in respect of a recip­i­ent locat­ed in a State or Union ter­ri­to­ry oth­er than that of the Input Ser­vice Dis­trib­u­tor, be dis­trib­uted as inte­grat­ed tax and the amount to be so dis­trib­uted shall be equal to the aggre­gate of the amount of input tax cred­it of cen­tral tax and State tax or Union ter­ri­to­ry tax that qual­i­fies for dis­tri­b­u­tion to such recip­i­ent in accor­dance with clause (d);

 

• the Input Ser­vice Dis­trib­u­tor shall issue an Input Ser­vice Dis­trib­u­tor invoice, as pre­scribed in sub-rule (1) of rule 54, clear­ly indi­cat­ing in such invoice that it is issued only for dis­tri­b­u­tion of input tax credit;

 

• the Input Ser­vice Dis­trib­u­tor shall issue an Input Ser­vice Dis­trib­u­tor cred­it note, as pre­scribed in sub-rule (1) of rule 54, for reduc­tion of cred­it in case the input tax cred­it already dis­trib­uted gets reduced for any reason;

 

• any addi­tion­al amount of input tax cred­it on account of issuance of a deb­it note to an Input Ser­vice Dis­trib­u­tor by the sup­pli­er shall be dis­trib­uted in the man­ner and sub­ject to the con­di­tions spec­i­fied in claus­es (a) to (f) and the amount attrib­ut­able to any recip­i­ent shall be cal­cu­lat­ed in the man­ner pro­vid­ed in clause (d) and such cred­it shall be dis­trib­uted in the month in which the deb­it note is includ­ed in the return in FORM GSTR‑6;

 

• any input tax cred­it required to be reduced on account of issuance of a cred­it note to the Input Ser­vice Dis­trib­u­tor by the sup­pli­er shall be appor­tioned to each recip­i­ent in the same ratio in which the input tax cred­it con­tained in the orig­i­nal invoice was dis­trib­uted in terms of clause (d), and the amount so appor­tioned shall be-

 

• reduced from the amount to be dis­trib­uted in the month in which the cred­it note is includ­ed in the return in FORM GSTR‑6; or

 

• added to the out­put tax lia­bil­i­ty of the recip­i­ent where the amount so appor­tioned is in the neg­a­tive by virtue of the amount of cred­it under dis­tri­b­u­tion being less than the amount to be adjusted.

 

(2) If the amount of input tax cred­it dis­trib­uted by an Input Ser­vice Dis­trib­u­tor is reduced lat­er on for any oth­er rea­son for any of the recip­i­ents, includ­ing that it was dis­trib­uted to a wrong recip­i­ent by the Input Ser­vice Dis­trib­u­tor, the process spec­i­fied in clause (j) of sub-rule

(1) shall apply, mutatis mutan­dis, for reduc­tion of credit.

 

(3) Sub­ject to sub-rule (2), the Input Ser­vice Dis­trib­u­tor shall, on the basis of the Input Ser­vice Dis­trib­u­tor cred­it note spec­i­fied in clause (h) of sub-rule (1), issue an Input Ser­vice Dis­trib­u­tor invoice to the recip­i­ent enti­tled to such cred­it and include the Input Ser­vice Dis­trib­u­tor cred­it note and the Input Ser­vice Dis­trib­u­tor invoice in the return in FORM GSTR‑6 for the month in which such cred­it note and invoice was issued.

 

 

5. Man­ner of claim­ing cred­it in spe­cial cir­cum­stances.- (1) The input tax cred­it claimed in accor­dance with the pro­vi­sions of sub-sec­tion (1) of sec­tion 18 on the inputs held in stock or inputs con­tained in semi-fin­ished or fin­ished goods held in stock, or the cred­it claimed on cap­i­tal goods in accor­dance with the pro­vi­sions of claus­es © and (d) of the said sub-sec­tion, shall be sub­ject to the fol­low­ing con­di­tions, namely,-

 

• the input tax cred­it on cap­i­tal goods, in terms of claus­es © and (d) of sub-section

• of sec­tion 18, shall be claimed after reduc­ing the tax paid on such cap­i­tal goods by five per­cent­age points per quar­ter of a year or part there­of from the date of the invoice or such oth­er doc­u­ments on which the cap­i­tal goods were received by the tax­able person.

 

• the reg­is­tered per­son shall with­in a peri­od of thir­ty days from the date of his becom­ing eli­gi­ble to avail the input tax cred­it under sub-sec­tion (1) of sec­tion 18 shall make a dec­la­ra­tion, elec­tron­i­cal­ly, on the com­mon por­tal in FORM GST ITC-01 to the effect that he is eli­gi­ble to avail the input tax cred­it as aforesaid;

 

• the dec­la­ra­tion under clause (b) shall clear­ly spec­i­fy the details relat­ing to the inputs held in stock or inputs con­tained in semi-fin­ished or fin­ished goods held in stock, or as the case may be, cap­i­tal goods– 
  • on the day imme­di­ate­ly pre­ced­ing the date from which he becomes liable to pay tax under the pro­vi­sions of the Act, in the case of a claim under clause (a) of sub-sec­tion (1) of sec­tion 18;
  • on the day imme­di­ate­ly pre­ced­ing the date of the grant of reg­is­tra­tion, in the case of a claim under clause (b) of sub-sec­tion (1) of sec­tion 18;
  • on the day imme­di­ate­ly pre­ced­ing the date from which he becomes liable to pay tax under sec­tion 9, in the case of a claim under clause © of sub- sec­tion (1) of sec­tion 18;
  • on the day imme­di­ate­ly pre­ced­ing the date from which the sup­plies made by the reg­is­tered per­son becomes tax­able, in the case of a claim under clause (d) of sub-sec­tion (1) of sec­tion 18;

 

• the details fur­nished in the dec­la­ra­tion under clause (b) shall be duly cer­ti­fied by a prac­tic­ing char­tered accoun­tant or a cost accoun­tant if the aggre­gate val­ue of the claim on account of cen­tral tax, State tax, Union ter­ri­to­ry tax and inte­grat­ed tax exceeds two lakh rupees;

 

• the input tax cred­it claimed in accor­dance with the pro­vi­sions of claus­es © and (d) of sub-sec­tion (1) of sec­tion 18 shall be ver­i­fied with the cor­re­spond­ing details fur­nished by the cor­re­spond­ing sup­pli­er in FORM GSTR‑1 or as the case may be, in FORM GSTR- 4, on the common

 

 

• The amount of cred­it in the case of sup­ply of cap­i­tal goods or plant and machin­ery, for the pur­pos­es of sub-sec­tion (6) of sec­tion 18, shall be cal­cu­lat­ed by reduc­ing the input tax on the

 

said goods at the rate of five per­cent­age points for every quar­ter or part there­of from the date of the issue of the invoice for such goods.

 

6.                  Transfer of credit on sale, merger, amalgamation, lease or transfer of a business.-

• A reg­is­tered per­son shall, in the event of sale, merg­er, de-merg­er, amal­ga­ma­tion, lease or trans­fer or change in the own­er­ship of busi­ness for any rea­son, fur­nish the details of sale, merg­er, de-merg­er, amal­ga­ma­tion, lease or trans­fer of busi­ness, in FORM GST ITC-02, elec­tron­i­cal­ly on the com­mon por­tal along with a request for trans­fer of unuti­lized input tax cred­it lying in his elec­tron­ic cred­it ledger to the transferee:

 

Pro­vid­ed that in the case of demerg­er, the input tax cred­it shall be appor­tioned in the ratio of the val­ue of assets of the new units as spec­i­fied in the demerg­er scheme.

 

• The trans­fer­or shall also sub­mit a copy of a cer­tifi­cate issued by a prac­tic­ing char­tered accoun­tant or cost accoun­tant cer­ti­fy­ing that the sale, merg­er, de-merg­er, amal­ga­ma­tion, lease or trans­fer of busi­ness has been done with a spe­cif­ic pro­vi­sion for the trans­fer of

 

• The trans­fer­ee shall, on the com­mon por­tal, accept the details so fur­nished by the trans­fer­or and, upon such accep­tance, the un-uti­lized cred­it spec­i­fied in FORM GST ITC-02 shall be cred­it­ed to his elec­tron­ic credit

 

• The inputs and cap­i­tal goods so trans­ferred shall be duly account­ed for by the trans­fer­ee in his books of account.

 

 

7. Man­ner of deter­mi­na­tion of input tax cred­it in respect of inputs or input ser­vices and rever­sal there­of.- (1) The input tax cred­it in respect of inputs or input ser­vices, which attract the pro­vi­sions of sub-sec­tion (1) or sub-sec­tion (2) of sec­tion 17, being part­ly used for the pur­pos­es of busi­ness and part­ly for oth­er pur­pos­es, or part­ly used for effect­ing tax­able sup­plies includ­ing zero rat­ed sup­plies and part­ly for effect­ing exempt sup­plies, shall be attrib­uted to the pur­pos­es of busi­ness or for effect­ing tax­able sup­plies in the fol­low­ing man­ner, namely,-

 

• the total input tax involved on inputs and input ser­vices in a tax peri­od, be denot­ed as ‘T’;

 

• the amount of input tax, out of ‘T’, attrib­ut­able to inputs and input ser­vices intend­ed to be used exclu­sive­ly for the pur­pos­es oth­er than busi­ness, be denot­ed as ‘T1’;

 

• the amount of input tax, out of ‘T’, attrib­ut­able to inputs and input ser­vices intend­ed to be used exclu­sive­ly for effect­ing exempt sup­plies, be denot­ed as ‘T2’;

 

• the amount of input tax, out of ‘T’, in respect of inputs and input ser­vices on which cred­it is not avail­able under sub-sec­tion (5) of sec­tion 17, be denot­ed as ‘T3’;

 

• the amount of input tax cred­it cred­it­ed to the elec­tron­ic cred­it ledger of reg­is­tered per­son, be denot­ed as ‘C1’ and cal­cu­lat­ed as-

C1 = T- (T1+T2+T3);

 

• the amount of input tax cred­it attrib­ut­able to inputs and input ser­vices intend­ed to be used exclu­sive­ly for effect­ing sup­plies oth­er than exempt­ed but includ­ing zero rat­ed sup­plies, be denot­ed as ‘T4’;

 

• ‘T1’, ‘T2’, ‘T3’ and ‘T4’ shall be deter­mined and declared by the reg­is­tered per­son at the invoice lev­el in FORM GSTR‑2;

 

• input tax cred­it left after attri­bu­tion of input tax cred­it under clause (g) shall be called com­mon cred­it, be denot­ed as ‘C2’ and cal­cu­lat­ed as-

C2 = C1- T4;

 

• the amount of input tax cred­it attrib­ut­able towards exempt sup­plies, be denot­ed as ‘D1’ and cal­cu­lat­ed as-

D1= (E÷F) × C2

where,

 

‘E’ is the aggre­gate val­ue of exempt sup­plies dur­ing the tax peri­od, and

 

‘F’ is the total turnover in the State of the reg­is­tered per­son dur­ing the tax period:

 

Pro­vid­ed that where the reg­is­tered per­son does not have any turnover dur­ing the said tax peri­od or the afore­said infor­ma­tion is not avail­able, the val­ue of ‘E/F’ shall be cal­cu­lat­ed by tak­ing val­ues of ‘E’ and ‘F’ of the last tax peri­od for which the details of such turnover are avail­able, pre­vi­ous to the month dur­ing which the said val­ue of ‘E/F’ is to be calculated;

 

Expla­na­tion: For the pur­pos­es of this clause, it is here­by clar­i­fied that the aggre­gate val­ue of exempt sup­plies and the total turnover shall exclude the amount of any duty or tax levied under entry 84 of List I of the Sev­enth Sched­ule to the Con­sti­tu­tion and entry 51 and 54 of List II of the said Schedule;

 

• the amount of cred­it attrib­ut­able to non-busi­ness pur­pos­es if com­mon inputs and input ser­vices are used part­ly for busi­ness and part­ly for non-busi­ness pur­pos­es, be denot­ed as ‘D2’, and shall be equal to five per cent. of C2; and

 

• the remain­der of the com­mon cred­it shall be the eli­gi­ble input tax cred­it attrib­uted to the pur­pos­es of busi­ness and for effect­ing sup­plies oth­er than exempt­ed sup­plies but includ­ing zero rat­ed sup­plies and shall be denot­ed as ‘C3’, where,-

C3 = C2 - (D1+D2);

 

• the amount ‘C3’ shall be com­put­ed sep­a­rate­ly for input tax cred­it of cen­tral tax, State tax, Union ter­ri­to­ry tax and inte­grat­ed tax;

 

• the amount equal to aggre­gate of ‘D1’ and ‘D2’ shall be added to the out­put tax lia­bil­i­ty of the reg­is­tered person:

 

Pro­vid­ed that where the amount of input tax relat­ing to inputs or input ser­vices used part­ly for the pur­pos­es oth­er than busi­ness and part­ly for effect­ing exempt sup­plies has been iden­ti­fied and seg­re­gat­ed at the invoice lev­el by the reg­is­tered per­son, the same shall be includ­ed in ‘T1’ and ‘T2’ respec­tive­ly, and the remain­ing amount of cred­it on such inputs or input ser­vices shall be includ­ed in ‘T4’.

 

• The input tax cred­it deter­mined under sub-rule (1) shall be cal­cu­lat­ed final­ly for the finan­cial year before the due date for fur­nish­ing of the return for the month of Sep­tem­ber fol­low­ing the end of the finan­cial year to which such cred­it relates, in the man­ner spec­i­fied in the said sub-rule and-

 

• where the aggre­gate of the amounts cal­cu­lat­ed final­ly in respect of ‘D1’ and ‘D2’ exceeds the aggre­gate of the amounts deter­mined under sub-rule (1) in respect of ‘D1’ and ‘D2’, such excess shall be added to the out­put tax lia­bil­i­ty of the reg­is­tered per­son in the month not lat­er than the month of Sep­tem­ber fol­low­ing the end of the finan­cial year to which such cred­it relates and the said per­son shall be liable to pay inter­est on the said excess amount at the rate spec­i­fied in sub-sec­tion (1) of sec­tion 50 for the peri­od start­ing from the first day of April of the suc­ceed­ing finan­cial year till the date of pay­ment; or

 

• where the aggre­gate of the amounts deter­mined under sub-rule (1) in respect of ‘D1’ and ‘D2’ exceeds the aggre­gate of the amounts cal­cu­lat­ed final­ly in respect of ‘D1’ and ‘D2’, such excess amount shall be claimed as cred­it by the reg­is­tered per­son in his return for a month not lat­er than the month of Sep­tem­ber fol­low­ing the end of the finan­cial year to which such credit

 

8. Man­ner of deter­mi­na­tion of input tax cred­it in respect of cap­i­tal goods and rever­sal there­of in cer­tain cas­es.- (1) Sub­ject to the pro­vi­sions of sub-sec­tion (3) of sec­tion 16, the input tax cred­it in respect of cap­i­tal goods, which attract the pro­vi­sions of sub-sec­tions (1) and

• of sec­tion 17, being part­ly used for the pur­pos­es of busi­ness and part­ly for oth­er pur­pos­es, or part­ly used for effect­ing tax­able sup­plies includ­ing zero rat­ed sup­plies and part­ly for effect­ing exempt sup­plies, shall be attrib­uted to the pur­pos­es of busi­ness or for effect­ing tax­able sup­plies in the fol­low­ing man­ner, namely,- 
  • the amount of input tax in respect of cap­i­tal goods used or intend­ed to be used exclu­sive­ly for non-busi­ness pur­pos­es or used or intend­ed to be used exclu­sive­ly for effect­ing exempt sup­plies shall be indi­cat­ed in FORM GSTR‑2 and shall not be cred­it­ed to his elec­tron­ic cred­it ledger;
  • the amount of input tax in respect of cap­i­tal goods used or intend­ed to be used exclu­sive­ly for effect­ing sup­plies oth­er than exempt­ed sup­plies but includ­ing zero-rat­ed sup­plies shall be indi­cat­ed in FORM GSTR‑2 and shall be cred­it­ed to the elec­tron­ic cred­it ledger;
  • the amount of input tax in respect of cap­i­tal goods not cov­ered under claus­es (a) and (b), denot­ed as ‘A’, shall be cred­it­ed to the elec­tron­ic cred­it ledger and the use­ful life of such goods shall be tak­en as five years from the date of the invoice for such goods:

Pro­vid­ed that where any cap­i­tal goods ear­li­er cov­ered under clause (a) is sub­se­quent­ly cov­ered under this clause, the val­ue of ‘A’ shall be arrived at by reduc­ing the input tax at the rate of five per­cent­age points for every quar­ter or part there­of and the amount ‘A’ shall be cred­it­ed to the elec­tron­ic cred­it ledger;

Expla­na­tion.- An item of cap­i­tal goods declared under clause (a) on its receipt shall not attract the pro­vi­sions of sub-sec­tion (4) of sec­tion 18, if it is sub­se­quent­ly cov­ered under this clause.

• the aggre­gate of the amounts of ‘A’ cred­it­ed to the elec­tron­ic cred­it ledger under clause ©, to be denot­ed as ‘Tc’, shall be the com­mon cred­it in respect of cap­i­tal goods for a tax period:

 

Pro­vid­ed that where any cap­i­tal goods ear­li­er cov­ered under clause (b) is sub­se­quent­ly cov­ered under clause ©, the val­ue of ‘A’ arrived at by reduc­ing the input tax at the rate of five per­cent­age points for every quar­ter or part there­of shall be added to the aggre­gate val­ue ‘Tc’;

• the amount of input tax cred­it attrib­ut­able to a tax peri­od on com­mon cap­i­tal goods dur­ing their use­ful life, be denot­ed as ‘Tm’ and cal­cu­lat­ed as-

Tm= Tc÷60

• the amount of input tax cred­it, at the begin­ning of a tax peri­od, on all com­mon cap­i­tal goods whose use­ful life remains dur­ing the tax peri­od, be denot­ed as ‘Tr’ and shall be the aggre­gate of ‘Tm’ for all such cap­i­tal goods;
• the amount of com­mon cred­it attrib­ut­able towards exempt­ed sup­plies, be denot­ed as ‘Te’, and cal­cu­lat­ed as-

Te= (E÷ F) x Tr

where,

 

‘E’ is the aggre­gate val­ue of exempt sup­plies, made, dur­ing the tax peri­od, and ‘F’ is the total turnover of the reg­is­tered per­son dur­ing the tax period:

Pro­vid­ed that where the reg­is­tered per­son does not have any turnover dur­ing the said tax peri­od or the afore­said infor­ma­tion is not avail­able, the val­ue of ‘E/F’ shall be cal­cu­lat­ed by tak­ing val­ues of ‘E’ and ‘F’ of the last tax peri­od for which the details of such turnover are avail­able, pre­vi­ous to the month dur­ing which the said val­ue of ‘E/F’ is to be calculated;

 

Expla­na­tion.- For the pur­pos­es of this clause, it is here­by clar­i­fied that the aggre­gate val­ue of exempt sup­plies and the total turnover shall exclude the amount of any duty or tax levied under entry 84 of List I of the Sev­enth Sched­ule to the Con­sti­tu­tion and entry 51 and 54 of List II of the said Schedule;

 

• the amount Te along with the applic­a­ble inter­est shall, dur­ing every tax peri­od of the use­ful life of the con­cerned cap­i­tal goods, be added to the out­put tax lia­bil­i­ty of the per­son mak­ing such claim of

 

(2) The amount Te shall be com­put­ed sep­a­rate­ly for cen­tral tax, State tax, Union ter­ri­to­ry tax and inte­grat­ed tax.

 

 

9. Man­ner of rever­sal of cred­it under spe­cial — (1) The amount of input tax cred­it relat­ing to inputs held in stock, inputs con­tained in semi-fin­ished and fin­ished goods held in stock, and cap­i­tal goods held in stock shall, for the pur­pos­es of sub-sec­tion (4) of sec­tion 18 or sub-sec­tion (5) of sec­tion 29, be deter­mined in the fol­low­ing man­ner, namely,-

 

• for inputs held in stock and inputs con­tained in semi-fin­ished and fin­ished goods held in stock, the input tax cred­it shall be cal­cu­lat­ed pro­por­tion­ate­ly on the basis of the cor­re­spond­ing invoic­es on which cred­it had been availed by the reg­is­tered tax­able per­son on such inputs;

 

• for cap­i­tal goods held in stock, the input tax cred­it involved in the remain­ing use­ful life in months shall be com­put­ed on pro-rata basis, tak­ing the use­ful life as five

 

Illus­tra­tion:

Cap­i­tal goods have been in use for 4 years, 6 month and 15 days.

The use­ful remain­ing life in months= 5 months ignor­ing a part of the month Input tax cred­it tak­en on such cap­i­tal goods= C

Input tax cred­it attrib­ut­able to remain­ing use­ful life= C mul­ti­plied by 5/60

 

• The amount, as spec­i­fied in sub-rule (1) shall be deter­mined sep­a­rate­ly for input tax cred­it of cen­tral tax, State tax, Union ter­ri­to­ry tax and integrated

 

• Where the tax invoic­es relat­ed to the inputs held in stock are not avail­able, the reg­is­tered per­son shall esti­mate the amount under sub-rule (1) based on the pre­vail­ing mar­ket price of the goods on the effec­tive date of the occur­rence of any of the events spec­i­fied in sub-section
• of sec­tion 18 or, as the case may be, sub-sec­tion (5) of section

 

• The amount deter­mined under sub-rule (1) shall form part of the out­put tax lia­bil­i­ty of the reg­is­tered per­son and the details of the amount shall be fur­nished in FORM GST ITC-03, where such amount relates to any event spec­i­fied in sub-sec­tion (4) of sec­tion 18 and in FORM GSTR-10, where such amount relates to the can­cel­la­tion of

 

• The details fur­nished in accor­dance with sub-rule (3) shall be duly cer­ti­fied by a prac­tic­ing char­tered accoun­tant or cost

 

• The amount of input tax cred­it for the pur­pos­es of sub-sec­tion (6) of sec­tion 18 relat­ing to cap­i­tal goods shall be deter­mined in the same man­ner as spec­i­fied in clause (b) of sub-rule (1) and the amount shall be deter­mined sep­a­rate­ly for input tax cred­it of cen­tral tax, State tax, Union ter­ri­to­ry tax and inte­grat­ed tax:

 

Pro­vid­ed that where the amount so deter­mined is more than the tax deter­mined on the trans­ac­tion val­ue of the cap­i­tal goods, the amount deter­mined shall form part of the out­put tax lia­bil­i­ty and the same shall be fur­nished in FORM GSTR‑1.

 

10. Con­di­tions and restric­tions in respect of inputs and cap­i­tal goods sent to the job work­er.- (1) The inputs, semi-fin­ished goods or cap­i­tal goods shall be sent to the job work­er under the cov­er of a chal­lan issued by the prin­ci­pal, includ­ing where such goods are sent direct­ly to a job-worker.

 

• The chal­lan issued by the prin­ci­pal to the job work­er shall con­tain the details spec­i­fied in rule

 

• The details of chal­lans in respect of goods dis­patched to a job work­er or received from a job work­er or sent from one job work­er to anoth­er dur­ing a quar­ter shall be includ­ed in FORM GST ITC-04 fur­nished for that peri­od on or before the twen­ty-fifth day of the month suc­ceed­ing the said

 

• Where the inputs or cap­i­tal goods are not returned to the prin­ci­pal with­in the time stip­u­lat­ed in sec­tion 143, it shall be deemed that such inputs or cap­i­tal goods had been sup­plied by the prin­ci­pal to the job work­er on the day when the said inputs or cap­i­tal goods were sent out and the said sup­ply shall be declared in FORM GSTR‑1 and the prin­ci­pal shall be liable to pay the tax along with applicable

 

Expla­na­tion.- For the pur­pos­es of this Chapter,-

• the expres­sions “cap­i­tal goods” shall include “plant and machin­ery” as defined in the Expla­na­tion to sec­tion 17;

 

• for deter­min­ing the val­ue of an exempt sup­ply as referred to in sub-sec­tion (3) of sec­tion 17- 
  • the val­ue of land and build­ing shall be tak­en as the same as adopt­ed for the pur­pose of pay­ing stamp duty; and
  • the val­ue of secu­ri­ty shall be tak­en as one per cent. of the sale val­ue of such security.