139. Migration of existing taxpayers.—(1) On and from the appointed day, every person registered
under any of the existing laws and having a valid Permanent Account Number shall be issued a certificate
of registration on provisional basis, subject to such conditions and in such form and manner as may be
prescribed, which unless replaced by a final certificate of registration under sub-section (2), shall be liable
to be cancelled if the conditions so prescribed are not complied with.
(2) The final certificate of registration shall be granted in such form and manner and subject to such
conditions as may be prescribed.
(3) The certificate of registration issued to a person under sub-section (1) shall be deemed to have not
been issued if the said registration is cancelled in pursuance of an application filed by such person that he
was not liable to registration under section 22 or section 24.
140. Transitional arrangements for input tax credit.—(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, the amount of
CENVAT credit 6
[of eligible duties] 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 7
[within such time and] 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 Act; or
1. Subs. by Act 8 of 2023, s. 157, for clause (a) (w.e.f. 1-10-2023).
2. Clause (b) omitted by s. 157, ibid. (w.e.f. 1-10-2023).
3. Subs. by s. 157, ibid., for clause (c) (w.e.f. 1-10-2023).
4. Clause (e) omitted by s. 157, ibid. (w.e.f. 1-10-2023).
5. Subs. by s. 157, ibid., for certain words (w.e.f. 1-10-2023).
6. Ins. by Act 31 of 2018, s. 28 (w.e.f. 1-7-2017).
7. Ins. by Act 12 of 2020, s. 128 (w.e.f. 18-05-2020).
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(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
(iii) here the said amount of credit relates to goods manufactured and cleared under such
exemption notifications as are notified by the Government.
(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 CENVAT 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 1
[within such time and] 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 CENVAT credit under the existing law and is also admissible as input tax credit under this Act.
Explanation.––For the purposes of this sub-section, the expression “unavailed CENVAT credit”
means the amount that remains after subtracting the amount of CENVAT credit already availed in respect
of capital goods by the taxable person under the existing law from the aggregate amount of CENVAT
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 manufacture of exempted goods or provision of exempted services, or who was providing works
contract service and was availing of the benefit of notification No. 26/2012—Service Tax, dated the 20th
June, 2012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a
manufacturer, shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of
inputs held in stock and inputs contained in semi-finished or finished 2
[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 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 duty under the existing law in respect of such inputs;
(iv) such invoices or other prescribed documents were issued not earlier than twelve months
immediately preceding the appointed day; and
(v) the supplier of services is not eligible for any abatement under this Act:
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 duty 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 manufacture of taxable as well as exempted goods
under the Central Excise Act, 1944 (1 of 1944) or provision of taxable as well as exempted services under
Chapter V of the Finance Act, 1994 (32 of 1994), but which are liable to tax under this Act, shall be
entitled to take, in his electronic credit ledger,—
(a) the amount of CENVAT credit 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 CENVAT credit of eligible duties 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 services, in accordance with the provisions of sub-section (3).
1. Ins. by Act 12 of 2020, s. 128 (w.e.f. 18-05-2020).
2. Subs. by s. 128, ibid., for “goods held in stock on the appointed day subject to” (w.e.f. 18-5-2020).
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(5) A registered person shall be entitled to take, in his electronic credit ledger, credit of eligible duties
and taxes in respect of inputs or input services received on or after the appointed day but the duty or tax in
respect of which has been paid by the supplier under the 1
[existing law, within such time and in such
manner as may be prescribed], subject to the condition that the invoice or any other duty or 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 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
eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished 2
[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 person 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
immediately preceding the appointed day.
(7) Notwithstanding anything to the contrary contained in this Act, the input tax credit on account of
any services received prior to the appointed day by an Input Service Distributor shall be eligible for
distribution as 3
[credit under this Act, within such time and in such manner as may be prescribed,]
4
[whether the invoices relating to such services are received prior to, on or after, the appointed day].
(8) Where a registered person having centralised registration under the existing law has obtained a
registration under this Act, such person shall be allowed to take, in his electronic credit ledger, credit of
the amount of CENVAT credit carried forward in a return, furnished under the existing law by him, in
respect of the period ending with the day immediately preceding the appointed day 5
[within such time and
in such manner] as may be prescribed:
Provided that if the registered person furnishes his return for the period ending with the day
immediately preceding the appointed day within three months of the appointed day, such credit shall be
allowed subject to the condition that the said return is either an original return or a revised return where the
credit has been reduced from that claimed earlier:
Provided further that the registered person shall not be allowed to take credit unless the said amount is
admissible as input tax credit under this Act:
Provided also that such credit may be transferred to any of the registered persons having the same
Permanent Account Number for which the centralised registration was obtained under the existing law.
1. Subs. by Act 12 of 2020, s. 128, for “existing law” (w.e.f. 18-5-2020).
2. Subs. by s. 128, ibid., for “goods held in stock on the appointed day subject to” (w.e.f. 18-5-2020).
3. Subs. by s. 128, ibid., for “credit under this Act even if” (w.e.f. 18-5-2020).
4. Subs. by Act 15 of 2024, s. 147, for “even if the invoices relating to such services are received on or after the appointed day”
(w.e.f. 1-7-2017).
5. Subs. by Act 12 of 2020, s. 128, for “in such manner” (w.e.f. 18-5-2020).
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(9) Where any CENVAT credit availed for the input services provided under the existing law has
been reversed due to non-payment of the consideration within a period of three months, such 1
[credit can
be reclaimed within such time and in such manner as may be prescribed, subject to] the condition that the
registered person has made the payment of the consideration for that supply of services within a period of
three months from the appointed day.
(10) The amount of credit under sub-sections (3), (4) and (6) shall be calculated in such manner as
may be prescribed.
Explanation 1.—For the purposes of 2
[sub-sections (1), (3), (4)] and (6), the expression “eligible
duties” means––
(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods
of Special Importance) Act, 1957 (58 of 1957);
(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff
Act, 1975 (51 of 1975);
(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff
Act, 1975 (51 of 1975);
3* * * * *
(v) the duty of excise specified in the First Schedule to the Central Excise Tariff
Act, 1985 (5 of 1986);
(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985
(5 of 1986); and
(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001
(14 of 2001),
in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on
the appointed day.
Explanation 2.—For the purposes of 4
[sub-sections (1) and (5)], the expression “eligible duties and
taxes” means––
(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise
(Goods of Special Importance) Act, 1957 (58 of 1957);
(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975
(51 of 1975);
(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act,
1975 (51 of 1975);
5* * * * *
(v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985
(5 of 1986);
(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985
(5 of 1986);
(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001
(14 of 2001); and
(viii) the service tax leviable under section 66B of the Finance Act, 1994 (32 of 1994),
in respect of inputs and input services received on or after the appointed day.
6
[Explanation 3.—For removal of doubts, it is hereby clarified that the expression “eligible duties
and taxes” excludes any cess which has not been specified in Explanation 1 or Explanation 2 and any
1. Subs. by Act 12 of 2020, s. 128, for “credit can be reclaimed subject to” (w.e.f. 18-5-2020).
2. Subs. by Act 31 of 2018, s. 28, for “sub-section (3), (4)” (w.e.f. 1-7-2017).
3. Clause (iv) omitted by s. 28, ibid, (w.e.f. 1-7-2017).
4. Subs. by s. 28, ibid., for “sub-section (5)” (w.e.f. 1-7-2017).
5. Clause (iv) omitted by s. 28, ibid., (w.e.f. 1-7-2017).
6. The Explanation ins. by s. 28, ibid., (w.e.f. 1-7-2017).
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cess which is collected as additional duty of customs under sub-section (1) of section 3 of the Customs
Tariff Act, 1975 (51 of 1975).]
141. Transitional provisions relating to job work.––(1) Where any inputs received at a place of
business had been removed as such or removed after being partially processed to a job worker for further
processing, testing, repair, reconditioning or any other purpose in accordance with the provisions of
existing law prior to the appointed day and such inputs are returned to the said place on or after the
appointed day, no tax shall be payable if such inputs, after completion of the job work or otherwise, are
returned to the said place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding two months:
Provided further that if such inputs are not returned within the period specified in this sub-section, the
input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of
sub-section (8) of section 142.
(2) Where any semi-finished goods had been removed from the place of business to any other
premises for carrying out certain manufacturing processes in accordance with the provisions of existing
law prior to the appointed day and such goods (hereafter in this section referred to as “the said goods”)
are returned to the said place on or after the appointed day, no tax shall be payable, if the said goods, after
undergoing manufacturing processes or otherwise, are returned to the said place within six months from
the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding two months:
Provided further that if the said goods are not returned within the period specified in this
sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of
clause (a) of sub-section (8) of section 142:
Provided also that the manufacturer may, in accordance with the provisions of the existing law,
transfer the said goods to the premises of any registered person for the purpose of supplying therefrom on
payment of tax in India or without payment of tax for exports within the period specified in this
sub-section.
(3) Where any excisable goods manufactured at a place of business had been removed without
payment of duty for carrying out tests or any other process not amounting to manufacture, to any other
premises, whether registered or not, in accordance with the provisions of existing law prior to the appointed
day and such goods, are returned to the said place on or after the appointed day, no tax shall be payable if
the said goods, after undergoing tests or any other process, are returned to the said place within six months
from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding two months:
Provided further that if the said goods are not returned within the period specified in this
sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of
clause (a) of sub-section (8) of section 142:
Provided also that the manufacturer may, in accordance with the provisions of the existing law,
transfer the said goods from the said other premises on payment of tax in India or without payment of tax
for exports within the period specified in this sub-section.
(4) The tax under sub-sections (1), (2) and (3) shall not be payable, only if the manufacturer and the
job worker declare the details of the inputs or goods held in stock by the job worker on behalf of the
manufacturer on the appointed day in such form and manner and within such time as may be prescribed.
142. Miscellaneous transitional provisions.––(1) Where any goods on which duty, if any, had been
paid under the existing law at the time of removal thereof, not being earlier than six months prior to the
appointed day, are returned to any place of business on or after the appointed day, the registered person shall
be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other
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than a registered person, to the said place of business within a period of six months from the appointed day
and such goods are identifiable to the satisfaction of the proper officer:
Provided that if the said goods are returned by a registered person, the return of such goods shall be
deemed to be a supply.
(2) (a) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods
or services or both is revised upwards on or after the appointed day, the registered person who had
removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or
debit note, containing such particulars as may be prescribed, within thirty days of such price revision and
for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued
in respect of an outward supply made under this Act;
(b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or
services or both is revised downwards on or after the appointed day, the registered person who had removed
or provided such goods or services or both may issue to the recipient a credit note, containing such
particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act
such credit note shall be deemed to have been issued in respect of an outward supply made under this Act:
Provided that the registered person shall be allowed to reduce his tax liability on account of issue of
the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to
such reduction of tax liability.
(3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any
amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be
disposed of in accordance with the provisions of existing law and any amount eventually accruing to him
shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law
other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944):
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount
so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance
of the said amount as on the appointed day has been carried forward under this Act.
(4) Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing
law in respect of the goods or services exported before or after the appointed day, shall be disposed of in
accordance with the provisions of the existing law:
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount
so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance
of the said amount as on the appointed day has been carried forward under this Act.
(5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in
respect of services not provided shall be disposed of in accordance with the provisions of existing law and
any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary
contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B
of the Central Excise Act, 1944 (1 of 1944).
(6) (a) every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated
whether before, on or after the appointed day under the existing law shall be disposed of in accordance with
the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be
refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing
law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944)
and the amount rejected, if any, shall not be admissible as input tax credit under this Act:
Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the
said amount as on the appointed day has been carried forward under this Act;
104
(b) every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated
whether before, on or after the appointed day under the existing law shall be disposed of in accordance with
the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal,
review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax
under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.
(7) (a) every proceeding of appeal, review or reference relating to any output duty or tax liability
initiated whether before, on or after the appointed day under the existing law, shall be disposed of in
accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of
such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered
as an arrear of duty or tax under this Act and the amount so recovered shall not be admissible as input
tax credit under this Act.
(b) every proceeding of appeal, review or reference relating to any output duty or tax liability initiated
whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with
the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to
him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other
than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and the
amount rejected, if any, shall not be admissible as input tax credit under this Act.
(8) (a) where in pursuance of an assessment or adjudication proceedings instituted, whether before,
on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes
recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an
arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under
this Act;
(b) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after
the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the
taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the
contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central
Excise Act, 1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under
this Act.
(9) (a) where any return, furnished under the existing law, is revised after the appointed day and if,
pursuant to such revision, any amount is found to be recoverable or any amount of CENVAT credit is found to
be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under
this Act and the amount so recovered shall not be admissible as input tax credit under this Act;
(b) where any return, furnished under the existing law, is revised after the appointed day but within the
time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is
found to be refundable or CENVAT credit is found to be admissible to any taxable person, the same shall be
refunded to him in cash under the existing law, notwithstanding anything to the contrary contained in the said
law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and
the amount rejected, if any, shall not be admissible as input tax credit under this Act.
(10) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the
appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax
under the provisions of this Act.
(11) (a) notwithstanding anything contained in section 12, no tax shall be payable on goods under this
Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State;
(b) notwithstanding anything contained in section 13, no tax shall be payable on services under this
Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994
(32 of 1994);
(c) where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the
Finance Act, 1994 (32 of 1994), tax shall be leviable under this Act and the taxable person shall be entitled to
105
take credit of value added tax or service tax paid under the existing law to the extent of supplies made after
the appointed day and such credit shall be calculated in such manner as may be prescribed.
(12) Where any goods sent on approval basis, not earlier than six months before the appointed day,
are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax
shall be payable thereon if such goods are returned within six months from the appointed day:
Provided that the said period of six months may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding two months:
Provided further that the tax shall be payable by the person returning the goods if such goods are
liable to tax under this Act, and are returned after a period specified in this sub-section:
Provided also that tax shall be payable by the person who has sent the goods on approval basis if such
goods are liable to tax under this Act, and are not returned within a period specified in this sub-section.
(13) Where a supplier has made any sale of goods in respect of which tax was required to be deducted
at source under any law of a State or Union territory relating to Value Added Tax and has also issued an
invoice for the same before the appointed day, no deduction of tax at source under section 51 shall be
made by the deductor under the said section where payment to the said supplier is made on or after the
appointed day.
Explanation.––For the purposes of this Chapter, the expressions “capital goods”, “Central Value
Added Tax (CENVAT) credit”, “first stage dealer”, “second stage dealer”, or “manufacture” shall have
the same meaning as respectively assigned to them in the Central Excise Act, 1944 (1 of 1944) or the
rules made thereunder.