Section 18 of CGST Act 2017: Availability of Credit in Special Circumstances

Provisions under Section 18 of the Central Goods and Services Tax (CGST) Act, 2017 relating to “Availability of Credit in Special Circumstances”:

Section 18 of CGST Act 2017: Availability of Credit in Special Circumstances (CHAPTER V – INPUT TAX CREDIT)

(1) Subject to such conditions and restrictions as may be prescribed-

(a) a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act;

(b) a person who takes registration under sub-section (3) of section 25 shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration;

(c) where any registered person ceases to pay tax under section 10, he shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods on the day immediately preceding the date from which he becomes liable to pay tax under section 9:

Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed;

(d) where an exempt supply of goods or services or both by a registered person becomes a taxable supply, such person shall be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock relatable to such exempt supply and on capital goods exclusively used for such exempt supply on the day immediately preceding the date from which such supply becomes taxable:

Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed.

(2) A registered person shall not be entitled to take input tax credit under sub-section (1) in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply.

(3) Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains unutilised in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed.

(4) Where any registered person who has availed of input tax credit opts to pay tax under section 10 or, where the goods or services or both supplied by him become wholly exempt, he shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods, reduced by such percentage points as may be prescribed, on the day immediately preceding the date of exercising of such option or, as the case may be, the date of such exemption:

Provided that after payment of such amount, the balance of input tax credit, if any, lying in his electronic credit ledger shall lapse.

(5) The amount of credit under sub-section (1) and the amount payable under sub-section (4) shall be calculated in such manner as may be prescribed.

(6) In case of supply of capital goods or plant and machinery, on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher:

Provided that where refractory bricks, moulds and dies, jigs and fixtures are supplied as scrap, the taxable person may pay tax on the transaction value of such goods determined under section 15.

Note: CBEC notifies 01/07/2017 as the Commencement date for Sections 6 to 9, 11 to 21, 31 to 41, 42 [except proviso to sub-section (9)], 43 [except proviso to sub-section (9)], 44 to 50, 53 to 138, 140 to 145, 147 to 163 and 165 to 174 of the CGST Act 2017, vide Notification 9/2017.

Amendments History:

NA

—–

Note: The CGST Act 2017 has been notified vide GOI Notification dt. 12/04/2017, which has subsequently been amended through CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020, Finance Act 2021, Finance Act 2022, Finance Act 2023, CGST Amendment Act 2023, including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.

CBIC Updates (GST)

Index of GST Circulars, Notifications, Press Releases, Orders, etc. issued by CBIC from 2017 and onwards along with Section-wise/ Rule-wise Text of GST Acts/ Rules:

CGST: CGST Act/ Definitions, CGST Rules, GST Forms

IGST: IGST Act/ Definitions, IGST Rules

UTGST: UTGST Act/ Definitions, UTGST Rules

GST Circulars (CGST/ IGST/ UTGST): 2023, 2022, 2021, 2020, 2019, 2018, 2017

GST Instructions: 2023, 2022, 2021, 2020, 2019, 2018, 2017

CGST Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017

CGST Rate Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017

IGST Notifications: 2022, 2021, 2020, 2019, 2018, 2017

IGST Rate Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017

UT Tax/ UTGST Notifications: 2022, 2021, 2020, 2019, 2018, 2017

UT Tax/ UTGST Rate Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017

Compensation Cess Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017

Compensation Cess Rate Notifications: 2023, 2022, 2021, 2020, 2019, 2018, 2017

CBIC Orders (CGST/ IGST/ UTGST): 2023, 2022, 2021, 2020, 2019, 2018, 2017

CBIC Press Releases: 2020, 2019, 2018, 2017

Note: For Official/ updated copy, please visit the CBIC website.