Section 140 - Transitional arrangements for input tax credit of CGST ACT, 2017

             140. (1) A registered person, other than a person opting to pay tax under section 10,
shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried
forward in the return relating to the period ending with the day immediately preceding the
appointed day, furnished by him under the existing law in such manner as may be prescribed:
           Provided that the registered person shall not be allowed to take credit in the following
circumstances, namely:—
                        (i) where the said amount of credit is not admissible as input tax credit under this
  Act; or
                        (ii) where he has not furnished all the returns required under the existing law for
the period of six months immediately preceding the appointed date; or
                        (iii) where the said amount of credit relates to goods manufactured and cleared
under such exemption notifications as are notified by the Government.
              (2) A registered person, other than a person opting to pay tax under section 10, shall be
entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in
respect of capital goods, not carried forward in a return, furnished under the existing law by
him, for the period ending with the day immediately preceding the appointed day in such
manner as may be prescribed:
        Provided that the registered person shall not be allowed to take credit unless the said
credit was admissible as CENVAT credit under the existing law and is also admissible as input
tax credit under this Act.

              Explanation.––For the purposes of this sub-section, the expression “unavailed
CENVAT credit” means the amount that remains after subtracting the amount of CENVAT
credit already availed in respect of capital goods by the taxable person under the existing law
from the aggregate amount of CENVAT credit to which the said person was entitled in
respect of the said capital goods under the existing law.
               (3) A registered person, who was not liable to be registered under the existing law, or
who was engaged in the manufacture of exempted goods or provision of exempted services,
or who was providing works contract service and was availing of the benefit of notification
No. 26/2012—Service Tax, dated the 20th June, 2012 or a first stage dealer or a second stage
dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his
electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the appointed day subject to
the following conditions, namely:––
                      (i) such inputs or goods are used or intended to be used for making taxable
supplies under this Act;
                      (ii) the said registered person is eligible for input tax credit on such inputs under
this Act;
                      (iii) the said registered person is in possession of invoice or other prescribed
documents evidencing payment of duty under the existing law in respect of such
inputs;
                      (iv) such invoices or other prescribed documents were issued not earlier than
twelve months immediately preceding the appointed day; and
                      (v) the supplier of services is not eligible for any abatement under this Act:
         Provided that where a registered person, other than a manufacturer or a supplier of
services, is not in possession of an invoice or any other documents evidencing payment of
duty in respect of inputs, then, such registered person shall, subject to such conditions,
limitations and safeguards as may be prescribed, including that the said taxable person shall
pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to
take credit at such rate and in such manner as may be prescribed.
             (4) A registered person, who was engaged in the manufacture of taxable as well as
exempted goods under the Central Excise Act, 1944 or provision of taxable as well as exempted
services under Chapter V of the Finance Act, 1994, but which are liable to tax under this Act,
shall be entitled to take, in his electronic credit ledger,—
               (a) the amount of CENVAT credit carried forward in a return furnished under the
existing law by him in accordance with the provisions of sub-section (1); and
               (b) the amount of CENVAT credit of eligible duties in respect of inputs held in
stock and inputs contained in semi-finished or finished goods held in stock on the
appointed day, relating to such exempted goods or services, in accordance with the
provisions of sub-section (3).
           (5) A registered person shall be entitled to take, in his electronic credit ledger, credit of
eligible duties and taxes in respect of inputs or input services received on or after the
appointed day but the duty or tax in respect of which has been paid by the supplier under the
existing law, subject to the condition that the invoice or any other duty or tax paying document
of the same was recorded in the books of account of such person within a period of thirty
days from the appointed day:
       Provided that the period of thirty days may, on sufficient cause being shown, be
extended by the Commissioner for a further period not exceeding thirty days:
       Provided further that said registered person shall furnish a statement, in such manner
as may be prescribed, in respect of credit that has been taken under this sub-section

                (6) A registered person, who was either paying tax at a fixed rate or paying a fixed
amount in lieu of the tax payable under the existing law shall be entitled to take, in his
electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the appointed day subject to
the following conditions, namely:––
                      (i) such inputs or goods are used or intended to be used for making taxable
supplies under this Act;
                     (ii) the said registered person is not paying tax under section 10;
                    (iii) the said registered person is eligible for input tax credit on such inputs
under this Act;
                    (iv) the said registered person is in possession of invoice or other prescribed
documents evidencing payment of duty under the existing law in respect of inputs;
and
                    (v) such invoices or other prescribed documents were issued not earlier than
twelve months immediately preceding the appointed day.
               (7) Notwithstanding anything to the contrary contained in this Act, the input tax credit
on account of any services received prior to the appointed day by an Input Service Distributor
shall be eligible for distribution as credit under this Act even if the invoices relating to such
services are received on or after the appointed day.
               (8) Where a registered person having centralised registration under the existing law
has obtained a registration under this Act, such person shall be allowed to take, in his
electronic credit ledger, credit of the amount of CENVAT credit carried forward in a return,
furnished under the existing law by him, in respect of the period ending with the day
immediately preceding the appointed day in such manner as may be prescribed:
        Provided that if the registered person furnishes his return for the period ending with
the day immediately preceding the appointed day within three months of the appointed day,
such credit shall be allowed subject to the condition that the said return is either an original
return or a revised return where the credit has been reduced from that claimed earlier:
         Provided further that the registered person shall not be allowed to take credit unless
the said amount is admissible as input tax credit under this Act:
         Provided also that such credit may be transferred to any of the registered persons
having the same Permanent Account Number for which the centralised registration was
obtained under the existing law.
             (9) Where any CENVAT credit availed for the input services provided under the existing
law has been reversed due to non-payment of the consideration within a period of three
months, such credit can be reclaimed subject to the condition that the registered person has
made the payment of the consideration for that supply of services within a period of three
months from the appointed day.
            (10) The amount of credit under sub-sections (3), (4) and (6) shall be calculated in
such manner as may be prescribed.
                    Explanation 1.—For the purposes of sub-sections (3), (4) and (6), the expression
“eligible duties” means––
                        (i) the additional duty of excise leviable under section 3 of the Additional Duties
of Excise (Goods of Special Importance) Act, 1957;
                       (ii) the additional duty leviable under sub-section (1) of section 3 of the Customs
Tariff Act, 1975;
                      (iii) the additional duty leviable under sub-section (5) of section 3 of the Customs
Tariff Act, 1975;

                      (iv) the additional duty of excise leviable under section 3 of the Additional
Duties of Excise (Textile and Textile Articles) Act, 1978;
                      (v) the duty of excise specified in the First Schedule to the Central Excise Tariff
Act, 1985;
                     (vi) the duty of excise specified in the Second Schedule to the Central Excise
Tariff Act, 1985; and
                     (vii) the National Calamity Contingent Duty leviable under section 136 of the
Finance Act, 2001,
in respect of inputs held in stock and inputs contained in semi-finished or finished goods
held in stock on the appointed day.
                        Explanation 2.—For the purposes of sub-section (5), the expression “eligible duties
and taxes” means––
                           (i) the additional duty of excise leviable under section 3 of the Additional Duties
of Excise (Goods of Special Importance) Act, 1957;
                           (ii) the additional duty leviable under sub-section (1) of section 3 of the Customs
Tariff Act, 1975;
                            (iii) the additional duty leviable under sub-section (5) of section 3 of the Customs
Tariff Act, 1975;
                           (iv) the additional duty of excise leviable under section 3 of the Additional
Duties of Excise (Textile and Textile Articles) Act, 1978;
                           (v) the duty of excise specified in the First Schedule to the Central Excise Tariff
Act, 1985;
                          (vi) the duty of excise specified in the Second Schedule to the Central Excise
Tariff Act, 1985;
                           (vii) the National Calamity Contingent Duty leviable under section 136 of the
Finance Act, 2001; and
                          (viii) the service tax leviable under section 66B of the Finance Act, 1994,
in respect of inputs and input services received on or after the appointed day