CREDIT ON EXISTING STOCK AND ITS CONDITIONS

• A person who has applied for registration within 30 days of becoming liable to pay CST is 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 as on the date preceding the date, when he became liable for registration.
• A person opting for voluntary registration or applying for registration after 30 days of becoming liable can also take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock as on the date when he gets registration.
• A person when going out of Composition scheme for becoming regular dealer can take credit of input tax in respect of inputs held in slock, 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.
• An exempted supply when becomes taxable, a person engaged in such supply is also 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.

Conditions for taking credit on existing stock

1. The input tax credit on capital goods will be reduced by five percentage points per quarter of a year or part thereof from the date of invoice.
2. A declaration in FORM GST ITC-01 has to be filed within 30 days of becoming eligible for availing credit or within such further period as may be extended by the Commissioner by a notification in this behalf detailing the capital goods or inputs lying in stock or contained in semi finished or finished goods.
3. In case the claim is exceeding Rs. 2 lakhs, then this declaration will be certified by a practicing chartered account or cost accountant.
4. The input tax credit claimed by an ex-composite dealer or by a person whose goods or service have become taxable will be verified with the corresponding details furnished by the correct sponding supplier in his returns.