Input tax credit in respect of stock held on the appointed day

14.    (1)     A taxable person, who was registered under the repealed Act and

whose registration has been continued under section 21, shall be entitled to input tax credit in respect of the tax paid or payable under the repealed Act on the goods, other than capital goods, lying in stock with him on the appointed day, to such extent and in such manner and subject to such conditions, as may be prescribed. He shall, however, be eligible for input tax credit on capital goods, if he is in the business of resale of such goods:

Provided that such stock is out of the purchases made within twelve months prior to the appointed day. 

(2)     The taxable person, who intends to claim input tax credit under sub-section (1), shall within forty five days from the appointed day, furnish in the specified form to the designated officer, a statement of tax-paid goods held in stock.



(3)     Input tax credit shall not be available on goods held in stock on the appointed day in respect of which, deduction from gross turnover was claimed by such person under the repealed Act or rules.

(4)     Input tax credit on the stock, held on the appointed day, shall be allowed on the basis of the rate of tax, prevailing on the day preceding the appointed day or on the day of purchase of such goods under the repealed Act or the rate of tax, leviable under this Act, whichever is the lowest.

(5)     Input tax credit available under this section, shall be proportionately adjusted in equal installments over a period of one year beginning after three months from the appointed day in such manner, as may be prescribed.

(6)     No input tax credit under this section shall be allowed in respect of goods held in stock -

(a)      which are not included in the statement of taxable goods specified under sub-section (2); and

(b)     for which the person does not have in his possession sales vouchers, issued by a person, registered under the repealed Act, against the purchases of the said goods, or which are not recorded in his books of accounts.    

(7)     Onus to prove that the taxable goods held in the stock on the appointed day, has suffered tax under the repealed Act, shall be on the claimant of input tax credit.

(8)     Save as otherwise provided in this section, the provisions of section 13, shall apply mutatis mutandis to the input tax credit claimed under this section.