This article relates to Unutilized balance of VAT Credit (under UT VAT laws) standing on 30.06.2017.
A registered person under GST (other than those who opt to pay GST under Composition Levy) shall be entitled to take the amount of VAT credit and Credit of Entry Tax carried forward in the return under existing law relating to the period ending on 30 June 2017.
An additional condition shall not be allowed to take credit in the following circumstances:
(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 date (i.e.01 July 2017); or
(iii) where the said amount of credit relates to goods sold under such exemption notifications as are notified by the Government
However, if a dealer has made a claim for refund of unutilized Credit from UT government against sales under following circumstances, he will not be allowed to carry this credit under GST:
- Inter-state sales (Section 3 and Section 6 of CST Act)
- Export of goods out of India (Section 5(3) of CST Act)
- Inter- state stock transfer (Section 6A of CST Act)
- Sale to SEZ developer or SEZ unit (Section 8(8) of CST Act)
In such situation, he will be given refund of such balance by respective UT government subject to the condition that such refund claims substantiated in the manner and period specified under CST (Registration and Turnover) Rules, 1956.
However, where such credit not substantiated as per above, he will not be allowed to carry that amount as Input tax credit under GST. (It means, he neither be allowed to carry forward them as ITC nor received any refund).
