Deemed Input tax credit of tax on stock if invoice of supplier showing tax paid is not available :
Even if duty paying document is not available, input tax credit will be available on goods held in stock on 1-7- 2017, at such rates and in such manner as may be prescribed – proviso to section 140(3) of CGST Act and section 140(3) of CGST Act.
As per rule 1(3) of Transitional Provisions Rules, he can take input tax credit of 40% of his sale price, at the time of making sale. He can make sale within six months after 1-7-2017.
The provisions of rule 1(3) are as follows :
Deemed input tax credit of excise duty on goods in stock – A taxable person who was not earlier under Central Excise but is now under GST and does not have excise duty paying documents evidencing payment of excise duty, can take input tax credit of 40% of CGST payable by him. He takes credit when he sales this stock after 1-7-2017 by charging CGST. He can sale old stock upto six months. He has to submit stock statement and submit statement in form GST TRAN within 60 days.
Deemed input tax credit of State Vat on goods in stock – A taxable person who was not earlier under State Vat or was under composition scheme but is now under GST and does not have documents evidencing payment of State Vat, can take input tax credit of 40% of SGST payable by him. He takes credit when he sales this stock after 1-7-2017 by charging SGST. He can sale old stock upto six months. He has to submit stock statement and submit statement in form GST TRAN within 60 days.