CGST Section 18 – Availability of credit in special circumstances
(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 grant-ed 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 contain-ed
in semi-finish-ed or finish-ed 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
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
register-ed 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.
CGST Section 19 – Taking input tax credit in respect of inputs and capital goods sent for job work
(1) The principal shall, subject to such conditions and restrictions as may be prescribe-d, be allow-ed input tax credit on inputs sent to a job worker for job work.
(2) Notwithstanding anything contain-ed in clause (b) of sub-section (2) of section 16, the
principal shall be entitle-d to take credit of input tax on inputs even if the inputs are directly sent to a job
worker for job work without being first brought to his place of business.
(3) Where the inputs sent for job work are not receive-d back by the principal after completion of job work
or otherwise or are not supplie-d from the place of business of the job worker in accordance with clause (a)
or clause (b) of sub-section (1) of section 143 within one year of being sent out, it shall be
deem-ed that such inputs had been supplie-d by the principal to the job worker on the day when the said inputs were
sent out:
Provide-d that where the inputs are sen,t directly to a job worker, the period of one year shall be count-ed from
the date of receipt of inputs by the job worker.
(4) The principal shall, subject to such conditions and restrictions as may be prescribe-d, be allow-ed input
tax credit on capital goods sent to a job worker for job work.
(5) Notwithstanding anything contain-ed in clause (b) of sub-section (2) of section 16, the
principal shall be entitle-d to take credit of input tax on capital goods even if the capital goods are directly sen,t
to a job worker for job work without being first brought to his place of business.
(6) Where the capital goods sent for job work are not receiv-ed back by the principal within a period of
three years of being sen-t out, it shall be deem-ed that such capital goods had been supplie-d by the principal to the
job worker on the day when the said capital goods were sen,t out:
Provide-d that where the capital goods are sen-t directly to a job worker, the period of three years shall be
count-ed from the date of receipt of capital goods by the job worker.
(7) Nothing contain-ed in sub-section (3) or sub-section (6) shall apply to moulds and
dies, jigs and fixtures, or tools sent out to a job worker for job work.
Explanation.––For the purpose of this section, “principal” means the person referre-d to in section 143.
CGST Section – 20 = Manner of distribution of credit by Input Service Distributor
(1) The Input Service Distributor shall distribute the credit of central tax as central tax or integrated tax and integrated tax as integrated tax or central tax, by way of issue of a document containing the amount of input tax credit being distributed in such manner as may be prescribed.
(2) The Input Service Distributor may distribute the credit subject to the following conditions, namely:––
(a) the credit can be distributed to the recipients of credit against a document containing such details as may be prescribed;
(b) the amount of the credit distributed shall not exceed the amount of credit available for distribution;
(c) the credit of tax paid on input services attributable to a recipient of credit shall be distributed only to that recipient;
(d) the credit of tax paid on input services attributable to more than one recipient of credit shall be distributed amongst such recipients to whom the input service is attributable and such distribution shall be pro rata on the basis of the turnover in a State or turnover in a Union territory of such recipient, during the relevant period, to the aggregate of the turnover of all such recipients to whom such input service is attributable and which are operational in the current year, during the said relevant period;
(e) the credit of tax paid on input services attributable to all recipients of credit shall be distributed amongst such recipients and such distribution shall be pro rata on the basis of the turnover in a State or turnover in a Union territory of such recipient, during the relevant period, to the aggregate of the turnover of all recipients and which are operational in the current year, during the said relevant period.
Explanation.––For the purposes of this section,––
(a) the “relevant period” shall be––
(i) if the recipients of credit have turnover in their States or Union territories in the financial year preceding the year during which credit is to be distributed, the said financial year; or
(ii) if some or all recipients of the credit do not have any turnover in their States or Union territories in the financial year preceding the year during which the credit is to be distributed, the last quarter for which details of such turnover of all the recipients are available, previous to the month during which credit is to be distributed;
(b) the expression “recipient of credit” means the supplier of goods or services or both having the same Permanent Account Number as that of the Input Service Distributor;
(c) the term ‘‘turnover’’, in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of turnover, reduced by the amount of any duty or tax levied under entry 84 under entries 84 and 92A of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule.
CGST Section – 21 = Manner Of Recovery Of Credit Distributed In Excess
CGST Section 21 – Manner of recovery of credit distributed in excess reads:
Where the Input Service Distributor distributes the credit in contravention of the provisions contained in section 20 resulting in the excess distribution of credit to one or more recipients of credit, the excess credit so distributed shall be recovered from such recipients along with interest, and the provisions of section 73 or section 74, as the case may be, shall, mutatis mutandis, apply for a determination of the amount to be recovered.
CGST Section 22 – Persons Liable For Registration
(1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:
Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees.
Provided further that the Government may, at the request of a special category State and on the recommendations of the Council, enhance the aggregate turnover referred to in the first proviso from ten lakh rupees to such amount, not exceeding twenty lakh rupees and subject to such conditions and limitations, as may be so notified.
Provided also that the Government may, at the request of a State and on the recommendations of the Council, enhance the aggregate turnover from twenty lakh rupees to such amount not exceeding forty lakh rupees in case of supplier who is engaged exclusively in the supply of goods, subject to such conditions and limitations,as may be notified.
Explanation.––For the purposes of this sub-section, a person shall be considered to be engaged exclusively in the supply of goods even if he is engaged in exempt supply of services provided by way of extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount.
(2) Every person who, on the day immediately preceding the appointed day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.
(3) Where a business carried on by a taxable person registered under this Act is transferred, whether on account of succession or otherwise, to another person as a going concern, the transferee or the successor, as the
case may be, shall be liable to be registered with effect from the date of such transfer or succession.
(4) Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, demerger of two or more
companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, with effect from the date on which the Registrar of Companies issues a certificate of incorporation
giving effect to such order of the High Court or Tribunal.
Explanation.––For the purposes of this section,––
(i) the expression “aggregate turnover” shall include all supplies made by
the taxable person, whether on his own account or made on behalf of all his principals;
(ii) the supply of goods, after completion of job work, by a registered job worker shall be treated as the supply of goods by the principal referred to
in section 143, and the value of such goods shall not be include,d in the aggregate turnover of the registered job
worker;
(iii) the expression “special category States” shall mean the States as
specified in sub-clause (g) of clause (4) of article 279A of the Constitution.
Note: As per clause 11(b) of the CGST Amendment Act, 2018, after the words “State of Jammu and Kashmir” in clause (iii) of the Explanation to Section 22 of the CGST Act, 2017, the words “and States of Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand” shall be inserted. However, in the said clause (iii) of Explanation to section 22 of the CGST Act, 2017, there are no such words “State of Jammu and Kashmir” and hence we are not sure as to where such subsequent wording is to be inserted.
CGST Section – 23 = Persons Not Liable For Registration
In this section, you will find all details related to “CGST section 23 – Persons not liable for registration” with time to time amendments done in section 23 of Central Goods and Services Tax Act, 2017.
CGST Section 23 – Persons not liable for registration reads:
(1) The following persons shall not be liable to registration, namely:––
(a) any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods and Services Tax Act;
(b) an agriculturist, to the extent of supply of produce out of cultivation of land.
(2) The Government may, on the recommendations of the Council, by notification, specify the category of persons who may be exempted from obtaining registration under this Act.
Read: Notified category of persons exempted from GST Registrations
CGST Section – 24 = Compulsory Registration In Certain Cases
Notwithstanding anything contained in sub-section (1) of section 22, the following categories of persons shall be required to be registered under this Act,––
(i) persons making any inter-State taxable supply;
(ii) casual taxable persons making taxable supply;
(iii) persons who are required to pay tax under reverse charge;
(iv) person who are required to pay tax under sub-section (5) of section 9; (v) non-resident taxable persons making taxable supply;
(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;
(vii) persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this Act;
(ix) persons who supply goods or services or both, other than supplies specified under sub-section (5) of section 9, through such electronic commerce operator who is required to collect tax at source under section 52;
(x) every electronic commerce operator who is required to collect tax at source under section 52;
(xi) every person supplying online information and database access or retrieval services from a place outside India to a person in India, other than a registered person; and
(xii) such other person or class of persons as may be notified by the Government on the recommendations of the Council.
CGST Section – 25 = Procedure For Registration
(1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration, in such manner and subject to such conditions as may be prescribed:
Provided that a casual taxable person or a non-resident taxable person shall apply for registration at least five days prior to the commencement of business.
Provided further that a person having a unit, as defined in the Special Economic Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to apply for a separate registration, as distinct from his place of business located outside the Special Economic Zone in the same State or Union territory.
Explanation.—Every person who makes a supply from the territorial waters of India shall obtain registration in the coastal State or Union territory where the nearest point of the appropriate baseline is located.
(2) A person seeking registration under this Act shall be granted a single registration in a State or Union territory:
Provided that a person having multiple business verticals in a State or Union territory may be granted a separate registration for each business vertical, subject to such conditions as may be prescribed.
Provided that a person having multiple places of business in a State or Union territory may be granted a separate registration for each such place of business, subject to such conditions as may be prescribed.
(3) A person, though not liable to be registered under section 22 or section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered person, shall apply to such person.
(4) A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act.
(5) Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act.
(6) Every person shall have a Permanent Account Number issued under the Income-tax Act, 1961 in order to be eligible for grant of registration:
Provided that a person required to deduct tax under section 51 may have, in lieu of a Permanent Account Number, a Tax Deduction and Collection Account Number issued under the said Act in order to be eligible for grant of registration.
(6A) Every registered person shall undergo authentication, or furnish proof of possession of Aadhaar number, in such form and manner and within such time as maybe prescribed:
Provided that if an Aadhaar number is not assigned to the registered person,such person shall be offered alternate and viable means of identification in such manner as Government may, on the recommendations of the Council, prescribe:
Provided further that in case of failure to undergo authentication or furnish proof of possession of Aadhaar number or furnish alternate and viable means of identification, registration allotted to such person shall be deemed to be invalid and the other provisions of this Act shall apply as if such person does not have a registration.
(6B) On and from the date of notification, every individual shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number, in such manner as the Government may, on the recommendations of the Council, specify in the said notification:
Provided that if an Aadhaar number is not assigned to an individual, such individual shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification.
(6C) On and from the date of notification, every person, other than an individual,shall, in order to be eligible for grant of registration, undergo authentication, or furnish proof of possession of Aadhaar number of the Karta, Managing Director, whole time Director, such number of partners, Members of Managing Committee of Association,Board of Trustees, authorised representative, authorised signatory and such other class of persons, in such manner, as the Government may, on the recommendations ofthe Council, specify in the said notification:
Provided that where such person or class of persons have not been assigned the Aadhaar Number, such person or class of persons shall be offered alternate and viable means of identification in such manner as the Government may, on the recommendations of the Council, specify in the said notification.
(6D) The provisions of sub-section (6A) or sub-section (6B) or sub-section (6C)shall not apply to such person or class of persons or any State or Union territory or part thereof, as the Government may, on the recommendations of the Council, specify by notification.
Explanation.—For the purposes of this section, the expression “Aadhaar number” shall have the same meaning as assigned to it in clause (a) of section 2 of the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services)Act, 2016.
(7) Notwithstanding anything contained in sub-section (6), a non-resident taxable person may be granted registration under sub-section (1) on the basis of such other documents as may be prescribed.
(8) Where a person who is liable to be registered under this Act fails to obtain registration, the proper officer may, without prejudice to any action which may be taken under this Act or under any other law for the time being in force, proceed to register such person in such manner as may be prescribed.
(9) Notwithstanding anything contained in sub-section (1),––
(a) any specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries; and
(b) any other person or class of persons, as may be notified by the Commissioner, shall be granted a Unique Identity Number in such manner and for such purposes, including refund of taxes on the notified supplies of goods or services or both received by them, as may be prescribed.
(10) The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as may be prescribed.
(11) A certificate of registration shall be issued in such form and with effect from such date as may be prescribed.
(12) A registration or a Unique Identity Number shall be deemed to have been granted after the expiry of the period prescribed under sub-section (10), if no deficiency has been communicated to the applicant within that period.
CGST Section – 26 = Deemed Registration
(1) The grant of registration or the Unique Identity Number under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be a grant of registration or the Unique Identity Number under this Act subject to the condition that the application for registration or the Unique Identity Number has not been rejected under this Act within the time specified in sub-section (10) of section 25.
(2) Notwithstanding anything contained in sub-section (10) of section 25, any rejection of application for registration or the Unique Identity Number under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be a rejection of application for registration under this Act.
CGST Section – 27 = Special Provisions Relating To Casual Taxable Person And Non-Resident Taxable Person
In this section, you will find all details related to “CGST section 27 – Special provisions relating to casual taxable person and non-resident taxable person” with time to time amendments done in section 27 of Central Goods and Services Tax Act, 2017.
CGST Section 27 – Special provisions relating to casual taxable person and non-resident taxable person reads:
(1) The certificate of registration issued to a casual taxable person or a non-resident taxable person shall be valid for the period specified in the application for registration or ninety days from the effective date of registration, whichever is earlier and such person shall make taxable supplies only after the issuance of the certificate of registration:
Provided that the proper officer may, on sufficient cause being shown by the said taxable person, extend the said period of ninety days by a further period not exceeding ninety days.
(2) A casual taxable person or a non-resident taxable person shall, at the time of submission of application for registration under sub-section (1) of section 25, make an advance deposit of tax in an amount equivalent to the estimated tax liability of such person for the period for which the registration is sought:
Provided that where any extension of time is sought under sub-section (1), such taxable person shall deposit an additional amount of tax equivalent to the estimated tax liability of such person for the period for which the extension is sought.
(3) The amount deposited under sub-section (2) shall be credited to the electronic cash ledger of such person and shall be utilised in the manner provided under section 49.
CGST Section – 28 = Amendment Of Registration
(1) Every registered person and a person to whom a Unique Identity Number has been assigned shall inform the proper officer of any changes in the information furnished at the time of registration or subsequent thereto, in such form and manner and within such period as may be prescribed.
(2) The proper officer may, on the basis of information furnished under sub-section
(1) or as ascertained by him, approve or reject amendments in the registration particulars in such manner and within such period as may be prescribed:
Provided that approval of the proper officer shall not be required in respect of amendment of such particulars as may be prescribed:
Provided further that the proper officer shall not reject the application for amendment in the registration particulars without giving the person an opportunity of being heard.
(3) Any rejection or approval of amendments under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a rejection or approval under this Act.