CA Certificate Formats u/s 18(1)(d) of CGST Act/SGST Act

ICAI indirect tax Committee has issued the  issued a set of various draft ‘  Certificates under GST Law  (SGST/ CGST Acts)

Certificate under the State Goods and Services Tax Act, 2017 (in short “SGST Act”) and the Central Goods and Services Tax Act, 2017 (in short “CGST Act”) in terms of Section 18(1)(d) of the said Acts

1. M/s. __________________ (hereinafter referred to as the “Applicant’) is a registered person vide GSTIN…………… and is having its principal place of business at.
____________________________________________________ in the State of ___________.

The Applicant has the following additional places of business duly registered in the State of ________:
a. _________________________________________________
b. _________________________________________________
The principal place of business and the additional places of business in the State of State have been
duly registered with effect from ____________.

2. The Applicant has been effecting exempted supplies of_______ (HSN :____) w.e.f. _________up to ___________. On and from__________, such exempted supplies have become taxable and the Applicant has been discharging the applicable taxes on such supplies.

3. In terms of Section 18(1)(d) of the CGST and SGST Acts, where an exempt supply by a registered
person becomes taxable supply, the registered person is eligible to avail Input Tax Credit in respect
of inputs held in stock and inputs contained in semi-finished or finished goods held in stock
relatable to such exempt supplies and on capital goods (as reduced by the prescribed percentage
points) exclusively used for such exempt supplies on the day immediately preceding the date on
which such exempt supplies become taxable supplies under the CGST / SGST Acts, 2017 i.e.
__________.

4. We have examined the books of accounts and other relevant documents / records of the Applicant and on the basis of such examination & the information and explanation furnished to us, we  hereby certify that, subject to our remarks / comments in para 6 infra, the Applicant is eligible to avail Input Tax Credit of Rs………. on inputs held in stock and inputs contained in semi-finished
or finished goods held in stock relatable to such exempt supplies and on capital goods (as reduced
by the prescribed percentage points) exclusively used for such exempt supplies on the day
immediately preceding the date on which such exempt supplies become taxable supplies under
the CGST / SGST Acts, 2017.

5. The relevant details of such inputs held in stock, inputs contained in semi-finished or finished
goods held in stock and capital goods as on ____________(that is the day preceding the date on
which such exempt supplies become taxable supplies under the CGST / SGST Acts, 2017) and the
corresponding input tax credit is provided as Appendix A.

6. Remarks / comments (Refer Para 4 supra):
a. The inputs held in stock (based on FIFO method) on the day immediately preceding the date
on which such exempt supplies become taxable supplies under the CGST / SGST Acts, 2017
i.e. ________ has been physically verified by us on __________along with the
corresponding tax invoices and books of accounts and other relevant records and documents
maintained by the Applicant.
b. The inputs contained in semi-finished or finished goods held in stock (based on FIFO
method) are based on the management certificate furnished to us and verified by us along with
the corresponding tax invoices and books of accounts and other relevant records and
documents maintained by the Applicant_______.
c. The input tax credit in respect of capital goods as reduced by the percentage points
prescribed under Rule 40 (1) (a) of the CGST / SGST Rules, 2017 is enclosed as Appendix
B.

7. This certificate has been issued in terms of Section 18(1) (d) of the SGST / CGST Acts, 2017
read with Rule 40 (1) (d) of the CGST / SGST Rules, 2017.

For _______________,
Chartered Accountants

Place: _____________
Date: ______________

_______________

                                                                                                              Partner
Firm Registration Number: _______
Membership Number: ______

Check points for the Chartered Accountant –
i. Verify registration particulars with the Registration Certificate.
ii. Check whether declaration in Form GST ITC-01 is filed by the assessee on GST portal for
entitlement to claim such credits within 30 days of being entitled to do so.
iii. Check the books and records and other relevant documents and registers relating to inputs held in
stock and inputs contained in semi-finished or finished goods held in stock relatable to such
exempt supplies and capital goods exclusively used for such exempt supplies on the date
immediately preceding the date on which such exempt supplies become taxable supplies under
the CGST / SGST Acts, 2017. Eligibility of such credits also needs to be checked under Section
16 and Section 17 of the CGST / SGST Acts, 2017.

iv. Check computation of input tax credit from tax invoices / bills of entry or other relevant
documents.
v. Ensure that the input tax credit on capital goods has been reduced by five percentage points per
quarter of a year or part thereof, from the date of invoice.
vi. The books of accounts and relevant documents / records of the Applicant should be thoroughly
verified to identify the exempt supplies effected by the Applicant. The relevant notifications
issued by the Government should also be meticulously perused and documented to identify the
date on which such exempt supplies have become taxable supplies.
vii. Ensure that a declaration is obtained from the Applicant for the listing of stock and capital goods including quantity

viii. Obtain a list of existing capital assets with the purchase dates (for a period of 5 years). Cross
check the listing with the fixed asset register maintained by the Applicant.
ix. Ensure that the claim of credits under this Section is made only on inputs held in stock and inputs  contained in semi-finished or finished goods held in stock relatable to such exempt supplies and  capital goods exclusively used for such exempt supply. Where capital goods have been used for
both – taxable and exempt supplies, no credit would be eligible to the Applicant.

x. The bills of entry / tax invoices should not be older than 1 year on the day on which the Applicant
is liable to pay tax (Section 18(2) of the CGST / SGST Acts, 2017). The tax invoice must be the
one containing the prescribed particulars (Section 16(2) of the CGST / SGST Acts, 2017 to be
read with Rule 46 of the CGST / SGST Rules, 2017).
xi. Ensure that the debit notes / credit notes, if any, are recorded / accounted against the vendor
invoice which are forming part of the closing inventory

xii. Ensure compliance with Rule 40(1) (e) of the CGST / SGST Rules, 2017 regarding verification of
the credits claimed with the details furnished by the supplier in Form GSTR-1 or Form GSTR-4,
as applicable.
xiii. This certificate is required to be issued only if the aggregate value of the claim on account of
SGST / CGST / UTGST and IGST exceeds rupees two lakhs (Rule 40 (1)(d) of the CGST / SGST
Rules, 2017)

xiv. This certificate is to be suitably modified wherever applicable. The names of the registered
persons, dates, addresses etc. are only illustrative and needs to be modified in each case. Any
resemblance to any person / place is purely unintentional.
xv. This certificate is to be issued in respect of a person who effects exempt supplies, those of which
have become taxable supplies subsequently.
xvi. Ensure that the certificate issued is in accordance with the Guidance note on Reports and
Certificates for special purpose issued by the ICAI.
xvii. Ensure that a letter of representation is taken from the management for the details and
information provided by them.

Appendix B – Certificate issued under the State Goods and Services Tax Act, 2017 (in short “SGST Act”) and the Central Goods and Services Tax Act, 2017 (in short “CGST Act”) in terms of section 18(1)(d) of the said Acts

ITC on capital goods reduced by percentage point

2 Figures given above are used for illustrative purposes.

This is as per ICAI indirect tax Committee  draft ‘  Certificates under GST Law  (SGST/ CGST Acts)‘, with a list of checkpoints to be reviewed by Chartered Accountants before issuing the respective certificates, as listed here-under:CA Certificates under GST Law : ICAI issued Draft Formats

 Refer GST Audit : Free Reference Material , Limit, Format , Process