Impact on goods during GST migration - Blog by Avalara

Published By Avalara India, 13 Sep 2017



GST has been rolled out and the biggest indirect tax regime since India’s independence is finally a reality.


Amidst all the buzz that GST has created in the Indian market, businesses are still struggling to find answers to questions such as the following:



  • What happened to the input tax credit for goods held in stock on 30th June 2017?

  • Can the VAT paid on purchases of such stock be claimed as input tax credit?

  • Will excise duty charged on the manufacturing of goods be available to offset the GST owed on the output?


Eligibility to claim input credit of VAT or excise duty


Input tax credit of VAT or excise duty paid during the procurement of goods under the previous tax structure can be claimed in different amounts, depending on whether you have documents related to the payment of the VAT or excise duty.



  1. If you possess documents that prove payment of VAT or excise duty tax, then you are eligible to claim 100% of the input tax credit.

  2. If you don’t possess documents proving previous payment of the VAT or excise duty tax, but CGST is payable on goods, then you may claim the following:



  • 60% of CGST, if the GST rate is 18% or more, or

  • 40% of CGST, if the GST rate is less than 18%


If IGST is payable on goods, then you may claim the following:



  • 30% of IGST, if GST rate is 18% or more, or

  • 20% of IGST, if GST rate is less than 18%


Point to Ponder – Central Sales Tax (CST) paid on interstate purchases of goods cannot be claimed as an input tax credit.


Unregistered under current laws, but registered under GST


To avail the input tax credit of VAT or excise duty if you were unregistered under the excise duty/VAT law but are registered now under GST law, the following conditions must be fulfilled:



  1. The goods in stock must be used for making........ 


Read more at - https://www.avalara.com/in/2017/09/11/impact-goods-gst-migration/

About Avalara - 
Avalara is an experienced application service provider (ASP) and partner of authorized GST Suvidha Providers (GSPs). To understand how our cloud-based application Avalara TrustFile GST can help you with GST compliance automation, contact us through https://www.avalara.com/in/products/gst-returns-filing