(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, credit of the amount
of Value Added Tax, and Entry Tax, if any, 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 Ordinance; 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
Provided further that so much of the said credit as is attributable to
any claim related to section 3, sub-section (3) of section 5, section 6,
section 6A or sub-section (8) of section 8 of the Central Sales Tax Act,
1956 (Central Act 74 of 1956) which is not substantiated in the manner,
and within the period, prescribed in rule 12 of the Central Sales Tax
(Registration and Turnover) Rules, 1957 shall not be eligible to be credited
to the electronic credit ledger:
Provided also that an amount equivalent to the credit specified in the
second proviso shall be refunded under the existing law when the said
claims are substantiated in the manner prescribed in rule 12 of the Central
Sales Tax (Registration and Turnover) Rules, 1957.
(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 input tax 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 input tax credit under the
existing law and is also admissible as input tax credit under this Ordinance.
Explanation.— For the purposes of this section, the expression
“unavailed input tax credit” means the amount that remains after
subtracting the amount of input tax credit already availed in respect of
capital goods by the taxable person under the existing law from the
aggregate amount of input tax 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 sale of exempted goods
or tax free goods, by whatever name called, or goods which have suffered
tax at the first point of their sale in the State and the subsequent sales of
which are not subject to tax in the State under the existing law but which
are liable to tax under this Ordinance or where the person was entitled to
the credit of input tax at the time of sale of goods, if any, shall be entitled
to take, in his electronic credit ledger, credit of the value added tax and
entry tax 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 Ordinance;
(ii) the said registered person is eligible for input tax credit on
such inputs under this Ordinance;
(iii) the said registered person is in possession of invoice or
other prescribed documents evidencing payment of tax under the existing
law in respect of such inputs; and
(iv) such invoices or other prescribed documents were issued
not earlier than twelve months immediately preceding the appointed day:
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 tax 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 sale of taxable
goods as well as exempted goods or tax free goods, by whatever name
called, under the existing law but which are liable to tax under this
Ordinance, shall be entitled to take, in his electronic credit ledger,—
(a) the amount of credit of the value added tax and entry tax,
if any, 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 credit of the value added tax and entry tax,
if any, 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 tax free goods, by whatever name called, 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 value added tax and entry tax, if any, in respect of
inputs received on or after the appointed day but the 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 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 the 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 value
added tax 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 Ordinance;
(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 Ordinance;
(iv) the said registered person is in possession of invoice or
other prescribed documents evidencing payment of tax 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) The amount of credit under sub-sections (3), (4) and (6) shall
be calculated in such manner as may be prescribed.