Overview of GST

  • Goods and Services Tax (GST) is an indirect tax throughout India to replace various taxes levied by the central and state


  • Taxes Overrode by GST:- Commercial Tax, Value Added Tax (VAT), Food Tax, Central Sales Tax (CST), Octroi, Entertainment Tax, Entry Tax, Purchase Tax, Luxury Tax, Advertisement taxes, Taxes applicable on lotteries


  • GST is levied on all transactions such as Sale, Transfer, Purchase, Barter, Lease, or Import of goods and/or services.


  • India will adopt a dual GST model, administered by both the Union and State Governments.


  • Transactions made within a single state will be levied with Central GST (CGST) and State GST (SGST) both. For inter-state transactions and imported goods or services, an Integrated GST (IGST) is levied.



Claim of ITC of Excise Duty by existing Unregistered Persons by Registering under GST

Under the current excise tax, only manufacturers with a turnover above Rs. 1.5 Crores are required to register and pay excise duty. Under GST, this threshold is reduced to 20 lakhs. So, many previously unregistered persons will now be required to register under GST.  Hence, one of the most important questions entrepreneur needs an answer is whether unregistered persons can claim CENVAT credit under GST on their stock in hand.

A registered person under GST, who was not registered under the existing law, will be allowed to avail input tax credit on goods held in stock on the appointed day.

CASE I: If Proof of Payment of Excise Duty Is Available
CASE II: If Proof of Payment of Excise Duty Is Not Available
100% ITC subject to fulfillment of certain conditions Þ    Credit shall be only after the output GST has been paid on the sale of goods.

Þ    If GST rate is less than 18% then 40% of the GST

Þ    If GST rate is 18% and above, then 60% of the GST applicable as ITC

Þ    If IGST is paid on the sale of such goods then ITC of 30% is available if IGST rate is 18% and above and 20% ITC for others

Þ    ITC is allowed subject to fulfillment of certain conditions



Our Corporate Professional Team is ever willing to provide assistance on any issue concerning GST, Insolvency and Bankruptcy Law, Business Model Advisory in India and Abroad, Customs Law, Corporate & Commercial Advisory, IPRs. Secretarial Compliances, Agreement Drafting & Negotiations etc. you may write us on contact@legale-services.com


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