17. Migration of existing tax payers.—(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 of the Central Goods and Services Tax Act.
18. Transitional arrangements for input tax credit.—(1) A registered person, other than a person
opting to pay tax under section 10 of the Central Goods and Services Tax Act, 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, not later than ninety days after the said day, 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
(ii) where he has not furnished all the returns required under the existing law for the period of six
months immediately preceding the appointed day; or
(iii) where the said amount of credit relates to goods sold under such exemption notifications as
are notified by the Government:
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 or section 6A or sub-section (8) of section 8 of the Central Sales Tax
Act, 1956 (74 of 1956) that 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 of the Central Goods
and Services Tax Act, 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:
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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
Act.
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 or goods which have suffered tax at first point of
their sale in the Union territory and the subsequent sales of which are not subject to tax in the Union
territory under the existing law but which are liable to tax under this Act or where the person was entitled
to the credit of input tax at the time of sale of goods, shall be entitled to take, in his electronic credit
ledger, 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 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.
(4) A registered person, who was engaged in the sale of taxable goods as well as exempted goods or
tax free goods under the existing law but which are liable to tax under this Act, 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 in accordance with the provisions of subsection (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
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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
Act;
(ii) the said registered person is not paying tax under section 10 of the Central Goods and
Services Tax Act;
(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 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.
19. Transitional provisions relating to job work.—(1) Where any inputs received at a place of
business had been dispatched as such or dispatched 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 a period of six months or the extended
period from the appointed day, 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 of the Central Goods and Services Tax Act.
(2) Where any semi-finished goods had been despatched from any 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 (hereinafter 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 appointedday:
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 a 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 subsection (8) of section 142 of the Central Goods and Services Tax Act:
Provided also that the person despatching the goods 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 six months or the
extended period, as the case may be, from the appointed day.
(3) Where any goods had been despatched from the place of business without payment of tax for
carrying out tests or any other process 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 of business 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 such 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:
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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 subsection (8) of section 142 of the Central Goods and Services Tax Act:
Provided also that the person despatching the goods 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 six months or the extended period, as the case may be, from the
appointed day.
(4) The tax under sub-sections (1), (2) and (3) shall not be payable only if the person despatching the
goods and the job worker declare the details of the inputs or goods held in stock by the job worker on
behalf of the said person on the appointed day in such form and manner and within such time as may be
prescribed.
20. Miscellaneous transitional provisions.—(1) Where any goods on which tax, if any, had been
paid under the existing law at the time of sale 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 tax paid under the existing law where such goods are returned
by a person, other 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
is revised upwards on or after the appointed day, the registered person who had sold such goods 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 is
revised downwards on or after the appointed day, the registered person who had sold such goods 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 input tax credit, 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
refunded to him in cash in accordance with the provisions of the said law:
Provided that where any claim for refund of the amount of input tax credit is fully or partially
rejected, the amount so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of input tax 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 tax paid under the existing
law in respect of the goods exported before or after the appointed day shall be disposed of in accordance
with the provisions of the existing law:
Provided that where any for refund of input tax credit is fully or partially rejected, the amount so
rejected shall lapse:
Provided further that no refund shall be allowed of any amount of input tax credit where the balance
of the said amount as on the appointed day has been carried forward under this Act.
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(5) (a) Every proceeding of appeal, revision, review or reference relating to a claim for input tax
credit 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 of credit found to be admissible to
the claimant shall be refunded to him in cash in accordance with the provisions of the existing law 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 input tax credit where the balance of the said
amount as on the appointed day has been carried forward under this Act.
(b) Every proceeding of appeal, revision, review or reference relating to recovery of input tax credit
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 of credit becomes recoverable as a
result of such appeal, revision, 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.
(6) (a) Every proceeding of appeal, revision, review or reference relating to any output 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, revision, review or reference, the same shall, unless recovered under the existing law, be recovered as
an arrear of tax under this Act and amount so recovered shall not be admissible as input tax credit under this
Act.
(b) Every proceeding of appeal, revision, review or reference relating to any output 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 in accordance with the provisions of the existing law and the amount rejected, if any, shall not be
admissible as input tax credit under this Act.
(7) (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 and the
amount rejected, if any, shall not be admissible as input tax credit under this Act.
(8) (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 input tax 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 input tax credit is found to be admissible to any taxable person, the
same shall be refunded to him in cash under the existing law and the amount rejected, if any, shall not be
admissible as input tax credit under this Act.
(9) 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.
(10) (a) Notwithstanding anything contained in section 12 of the Central Goods and Services Tax
Act, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods
under the existing law.
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(b) Notwithstanding anything contained in section 13 of the Central Goods and Services Tax Act, 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 any existing law relating to sale of goods 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 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.
(11) 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 the period specified in thissub-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 the period specified in this sub-section.
(12) Where a supplier has made any sale of goods in respect of which tax was required to be deducted at
source under any existing law relating to sale of goods and has also issued an invoice for the same before the
appointed day, no deduction of tax at source under section 51 of the Central Goods and Services Tax Act, as
made applicable to this Act, shall be made by the deductor under the said section where payment to the said
supplier is made on or after theappointed day.
Explanation.—For the purposes of this Chapter, the expression “capital goods” shall have the same
meaning as assigned to it in any existing law relating to sale of goods.