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TMI Blog2025 (3) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... , when GST was introduced on 01.07.2017, it claimed that it was eligible for availing transitional credit under Chapter XX of the Kerala State Goods and Services Tax Act, 2017 (hereinafter referred to as "KSGST Act") as regards the tax paid on the purchase of computers/laptops. Therefore, the petitioner submitted Ext.P1 application seeking an advance ruling as seen from Ext.P1. The questions posed for consideration by the authority under the statute, which read as under: 14 Question(s) on which advance ruling is required * Whether computers, laptops etc. used by the applicant for providing output service would qualify as inputs for the purpose of availing transitional input tax credit under Section 140(3) of Chapter XX of the Kerala State Goods and Service Tax Ordinance, 2017? * If the said goods are physically available as closing stock with the Applicant as on 30th June, 2017, can the Applicant avail input tax credit of the VAT paid on the same? The authority under the statute issued Ext.P2 dated 19.09.2018, finding that the petitioner had no liability under the VAT period and hence, it is not entitled to transitional credit under Chapter XX of the KS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "capital goods" under Explanation to Chapter XX of the KSGST Act is not applicable to the claim under Section 140(3) since the term "capital goods" is not referred to anywhere under Section 140(3). Therefore, the Explanation under Chapter XX would apply only to Section 140(2) and similar provisions under Chapter XX where "capital goods" are referred to. 9. I have considered the rival submissions as above and the relevant provisions of the law. 10. The facts are not in dispute. The petitioner is a service provider. It did not have registration under the KVAT Act. However, it purchased computers/laptops locally suffering tax under the KVAT Act. The petitioner was not entitled to the input credit in the KVAT regime. Once GST was rolled out, the petitioner obtained registration under the GST Scheme. It claims the benefits of the transitional credit under Chapter XX of the KSGST Act, as regards the tax paid on the purchase of computers/laptops while effecting purchase as above. 11. Chapter XX of the KSGST Act provides for transitional provisions with respect to migrating taxpayers. Section 140 provides for transitional arrangements for input tax credits. Sub-section (1) thereto is wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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." Reading of the afore provision wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices. Thereby they had no tax liability under the erstwhile KVAT law. Further, they squarely fall under the definition of "Capital Goods" under Section 2(19) of the KSGST Act, 2017 and not under Section 2(59) of the KSGST Act, 2017. Hence the relevant transitional provision applicable in the instant case is Section 140(2) of the KSGST Act, 2017 and Section 140(3) of the KSGST Act cannot be invoked." With reference to the definition of the term "capital goods" and "input", as noticed above, the afore decision could have been upheld, but for a separate treatment with respect to the term "capital goods" under Chapter XX of the KSGST Act. 15. The provisions of Chapter XX of the KSGST Act also provided for an Explanation as under: "Explanation.- For the purposes of this Chapter, the expression "capital goods" shall have the same meaning as assigned to it in the Kerala Value Added Tax Act, 2003 (30 of 2004)." (Underlining supplied) Thus, as regards the provisions of Chapter XX of the KSGST Act, the term "capital goods" is to have the same meaning as assigned under the KVAT Act. Section 2(x) to the KVAT Act, 2003, defined "capital goods" as under: "(x) "Capital goods" means pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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