Treatment of Stock
A repeated and imminent query which we receive is the treatment of CENVAT and VAT Credit in respect of stock held on June 30, 2017, which will be sold post GST implementation. The treatment would depend on the nature of registration of the organization under the present laws.
Manufacturer registered under VAT only
This will cover small scale manufacturers who had opted out of excise. This will also cover manufacturers exempt from central excise and thus not registered.
Trader registered under Excise and VAT
This case will specifically cover the cases of dealers registered as first stage dealers, second stage dealers, registered importers and depots of manufacturers.
Trader Registered under VAT
A trader registered under VAT can carry forward the VAT credit. He is also eligible to claim actual / notional credit of excise duty on duty paid stock
Manufacturer/ Service provider not registered under any of current laws now registered under GST
Such a person is eligible to take credit of VAT, Excise duty, Additional Excise Duty, CVD and SAD in respect of raw materials, finished and semi-finished stock held on 30th June 2017
Trader not registered under any of current laws now registered under GST
A trader will be eligible claim credit of VAT, Excise duty and eligible customs duties paid on stock as per actuals. In case of absence of duty paying document, a notional credit scheme is also available
Manufacturer registered under Excise and VAT
A person registered under Central Excise and VAT laws is eligible to carry forward credit availed in the returns. Refer to the detailed provisions to know more
Manufacturer registered under Excise, VAT and Service Tax
A person registered under all the current laws is eligible to carry forward credit availed in the returns. Refer to the detailed provisions to know more
Service provider registered under Service Tax paying tax at normal rate
A service provider can carry forward unutilised cenvat credit in the GST regime. There are special provision for service provider having centralised registration