Whether input tax credit can be availed on input services and capital goods when there is application for new registration or voluntary registration under section 18
When there is application for new registration or voluntary registration under Section 23(1) or Section 23(3) GST , Input tax credit cannot be availed on the input services and capital goods .As per Section 18(1) and 18(2) of Revised Model GST Law .Input tax credit shall be available only on the stock held (inputs, inputs contained in semi-finished goods or finished goods) on the day immediately preceding the date from which he becomes liable to pay tax or preceding the date of grant of registration.
Relevant Extract of Section 18(1) and 18(2) of Revised Model GST Law
- Availability of credit in special circumstances
(1) A person who has applied for registration under the Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall, subject to such conditions and restrictions as may be prescribed, be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date from which he becomes liable to pay tax under the provisions of this Act.
(2) A person, who takes registration under sub-section (3) of section 23 shall, subject to such conditions and restrictions as may be prescribed, be entitled to take credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the day immediately preceding the date of grant of registration.