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TMI BlogTransitional credit of WIPX X X X Extracts X X X X X X X X Extracts X X X X ..... Transitional credit of WIP X X X X Extracts X X X X X X X X Extracts X X X X ..... ortional to the input were WIP is ITC of WIP was not available for trans1? Reply By Rajagopalan Ranganathan: The Reply: Sir, According to Section 140 (6) of the Central Goods and Services Act, 2017- "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished 11[goods held in stock on the appointed day, within such time and in such manner as may be prescribed, 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson 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 im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mediately preceding the appointed day." Therefore you are eligible to take credit of inputs and input services utilised in WIP. You may bring this provision to the notice of audit. However, I think the audit objection should be based on some other stronger grounds because I presume the Departmental Officers are aware of this provision. Reply By KASTURI SETHI: The Reply: How can the builder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer more ITC than available in the stock as on 30.6.17/1.7.17 ? Inputs contained in WIP is part of stock. Pl. read the para again and understand what is the factual object raised by the Audit wing of the department post the query again. Reply By Shilpi Jain: The Reply: Audit party is raising objection stating that building is immovable property and thereby transitional credit is not availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble which as per section 140 is available only w.r.t. goods. However, this can be contested. Reply By CAHemanth Kumar: The Reply: Yes for department when it comes to ITC they will say it as immovable property and ITC is not eligible. When it comes to sale of same under constructed property they will say it as not completed, works contract service and u have to pay tax. Reply By Shilpi Jain: T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Reply:
So, on the grounds mentioned by Hemanth, one can argue that in case transition credit is being denied, then the stand of taxing incomplete building under GST and ST is not correct. This can get them in a fix! X X X X Extracts X X X X X X X X Extracts X X X X
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