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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 ..... ". Therefore, insofar as the petitioner was using the computers/laptops for rendering services, they were not "capital goods" under Section 2(x) of the KVAT Act. When that be so, computers/laptops were not "capital goods" for the purposes of Chapter XX of the KSGST Act on account of the afore Explanation. In the light of the afore, the computers/laptops, which were used by the petitioner for rendering services would definitely fall under Chapter XX and were entitled to transitional credit.
There cannot be any doubt regarding the entitlement of the petitioner for transitional credit under Section 140(3), especially since the petitioner is eligible for input credit as against the computers/laptops under the KSGST Act.
Conclusion - The petitioner was entitled to transitional credit under Section 140(3) of Chapter XX of the KSGST Act as regards computers/laptops.
Petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner seeking a declaration as to its entitlement for transitional credit under the KSGST Act. 5. I have heard Sri. Jose Jacob, the learned counsel for the petitioner, Sri.Arun Ajay Shankar, the learned Government Pleader and Sri.P.R.Sreejith, the Senior Standing Counsel (CBIC). 6. Sri. Jose Jacob, the learned counsel for the petitioner, would contend that: i. The claim raised by the petitioner was under Section 140(3) and not under Section 140(2) of the KSGST Act. ii. Hence, the very consideration of the issues in Ext.P2/P3 was flawed. iii. He relies on the provisions of the KSGST Act, KVAT Act, etc., to contend that the expression "capital goods" has a different connotation with respect to the claim under Chapter XX of the KSGST Act as regards the extension of transitional credit. 7. Sri. Arun Ajay Shankar, the learned Government Pleader, would contend that: i. Since the petitioner was not entitled to the input credit under the existing law (KVAT), it cannot be extended under GST. ii. The petitioner is not entitled to the benefits of transitional credits since computers/laptops are admittedly "capital goods" which are excluded from the coverage of the te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to entitlement under sub- section (3) to Section 140. On the face of the afore, the findings contained in Ext.P2 issued by the Advance Ruling Authority are to be noticed. The said Authority made reference to the provisions of sub-section (2) to Section 140. The Authority thereafter referred to the definition of "input" under Section 2(59) of the KSGST Act and found that capital goods are not entitled to input credit. Similarly, reference is also made to the proviso to sub-section (2) denying transitional credit, if the same was not admissible as input credit under the existing VAT Act. True, under the KVAT Act, capital goods like computers/laptops are not eligible for extension of input credit as regards the tax paid on their purchase. However, the petitioner's claim, as noticed earlier, was not with reference to Section 140(1) or (2). Therefore, the reference made to the afore provision while issuing Exts.P2 and P4 were without any basis and it is found accordingly. 13. Now the claim of the petitioner with reference to the provisions of Section 140(3), under which Ext.P1 was filed, is to be noticed. Section 140(3) reads as under: "(3) A registered person, who was not liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a claim with respect to the first limb of Section 140(3) of the KSGST Act. 14. The petitioner's entitlement for availing credit of VAT/entry tax was in respect of "inputs" held in stock and "inputs" contained in semi-finished or finished goods held in stock as on the appointed date, provided they are used or intended to be used for making taxable supplies under the KSGST Act. The term "input", true, has a separate definition under Section 2(59) which reads as under: "2(59) "input" means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business;" (Underlining supplied) A reading of the afore provision makes it clear that capital goods used by a supplier in the course of furtherance of business are outside the purview of the term "input". The original authority, while issuing Ext.P2, has referred to the definition of the term "input" alone while considering the claim of the petitioner. The Appellate Authority while issuing Ext.P4 has also referred to the definition of the term "capital goods" under Section 2(19) of the KSGST Act, which reads as under: "2 (19) "capital goods" means goods, the value of which is capitali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner was using the computers/laptops for rendering services, they were not "capital goods" under Section 2(x) of the KVAT Act. When that be so, computers/laptops were not "capital goods" for the purposes of Chapter XX of the KSGST Act on account of the afore Explanation. In the light of the afore, the computers/laptops, which were used by the petitioner for rendering services would definitely fall under Chapter XX and were entitled to transitional credit. 16. Sri. Sreejith, the learned Senior Standing Counsel, contended that the Explanation referred to above would not apply to Section 140(3) of the KSGST Act since the term "capital goods" do not find a reference thereunder. According to him, the Explanation applies only to those provisions of Chapter XX in which the term "capital goods" is referred to. 17. I am unable to agree to the afore contention raised by the learned counsel since the Explanation extracted above adopts the definition from the KVAT Act wherever the term "capital goods" comes up for consideration under Chapter XX of the KSGST Act. In the case at hand, the claim is raised under Chapter XX with reference to Section 140(3). Therefore, though Section 140(3) doe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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