Sec 18:Availability of credit in special circumstances

[Tax Grid]

(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.

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