Section 18, Central Goods and Services Tax Act, 2017 [S10-6JV]
As at 6 September 2026. In force from 1 July 2017 by Notification No. 9/2017-Central Tax, dated 28-6-2017 [N10-27X].
18. Availability of credit in special circumstances.—
(1) Subject to such conditions and restrictions as may be prescribed-
(a) a person who has applied for registration under this Act within thirty days from the date on which he becomes liable to registration and has been granted such registration shall 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;
(b) a person who takes registration under sub-section (3) of section 25 shall 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;
(c) where any registered person ceases to pay tax under section 10, he shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods on the day immediately preceding the date from which he becomes liable to pay tax under section 9:
Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed;
(d) where an exempt supply of goods or services or both by a registered person becomes a taxable supply, such person shall 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 relatable to such exempt supply and on capital goods exclusively used for such exempt supply on the day immediately preceding the date from which such supply becomes taxable:
Provided that the credit on capital goods shall be reduced by such percentage points as may be prescribed.
(2) A registered person shall not be entitled to take input tax credit under sub-section (1) in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply.
(3) Where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer the input tax credit which remains unutilised in his electronic credit ledger to such sold, merged, demerged, amalgamated, leased or transferred business in such manner as may be prescribed.
(4) Where any registered person who has availed of input tax credit opts to pay tax under section 10 or, where the goods or services or both supplied by him become wholly exempt, he shall pay an amount, by way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock and on capital goods, reduced by such percentage points as may be prescribed, on the day immediately preceding the date of exercising of such option or, as the case may be, the date of such exemption:
Provided that after payment of such amount, the balance of input tax credit, if any, lying in his electronic credit ledger shall lapse.
(5) The amount of credit under sub-section (1) and the amount payable under sub-section (4) shall be calculated in such manner as may be prescribed.
(6) In case of supply of capital goods or plant and machinery, on which input tax credit has been taken, the registered person shall pay an amount equal to the input tax credit taken on the said capital goods or plant and machinery reduced by such percentage points as may be prescribed or the tax on the transaction value of such capital goods or plant and machinery determined under section 15, whichever is higher:
Provided that where refractory bricks, moulds and dies, jigs and fixtures are supplied as scrap, the taxable person may pay tax on the transaction value of such goods determined under section 15.
Defined terms in this text (16)
act: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (2) "act", used with reference to an offence or a civil wrong, shall include a series of acts, and words which refer to acts done extend also to illegal omissions;
act: 363 more definitions.
business: Section 2(17), Central Goods and Services Tax Act, 2017: "business" includes - (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;
business: 13 more definitions.
Constitution: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (15) "Constitution" shall mean the Constitution of India;
goods: Section 2, Central Goods and Services Tax Act, 2017 [S1061R] (In this Act, unless the context otherwise requires): "goods" means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply
goods: 38 more definitions.
input tax credit: Section 2(63), Central Goods and Services Tax Act, 2017: "input tax credit" means the credit of input tax;
lease: Section 105, Transfer of Property Act: "A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms. [Lessor, lessee, premium and rent defined] The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent."
lease: Section 2(7), Registration Act: "lease" includes a counterpart, kabuliyat, an undertaking to cultivate or occupy, and an agreement to lease;
person: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): "person" shall include any company or association or body of individuals, whether incorporated or not
person: 1 more definition.
registered: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (49) "registered", used with reference to a document, shall mean registered in India under the law for the time being in force for the registration of documents;
registered person: Section 2(94), Central Goods and Services Tax Act, 2017: "registered person" means a person who is registered under section 25 but does not include a person having a Unique Identity Number;
sale: Section 54, Transfer of Property Act: "Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. [Sale how made] Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument. In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property. [...] [Contract for sale] A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property.
section: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (54) "section" shall mean a section of the Act or Regulation in which the word occurs;
section: 363 more definitions.
sub-section: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): (61) "sub-section" shall mean a sub-section of the section in which the word occurs;
supply: Section 7(1), Central Goods and Services Tax Act, 2017: "For the purposes of this Act, the expression - "supply" includes- (a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; (aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation.-For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another; (b) import of services for a consideration whether or not in the course or furtherance of business; and (c) the activities specified in Schedule I, made or agreed to be made without a consideration."
taxable person: Section 2(107), Central Goods and Services Tax Act, 2017: "taxable person" means a person who is registered or liable to be registered under section 22 or section 24;
value: Section 2(41), Customs Act, 1962: "value", in relation to any goods, means the value thereof determined in accordance with the provisions of sub-section (1) or sub-section (2) of section 14;
year: Section 3, General Clauses Act, 1897 [S100SN] (In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context): "year" shall mean a year reckoned according to the British calendar
Made under this section, or naming it (4)
Circular No. 133/03/2020-GST [C10-4NP], 23 March 2020, in force. The text contains "section 18 of the Central Goods and Services Tax Act, 2017".
Circular No. 96/15/2019-GST [C10-3AH], 28 March 2019, in force. The text contains "sub-section (3) of section 18 of the Central Goods and Services Tax Act, 2017".
Notification No. 44/2017-Central Tax [N10-6RP], 13 October 2017, in force. The text contains "sub-section (1) of section 18 of the said Act".
Notification No. 67/2017-Central Tax [N10-8HS], 21 December 2017, in force. The text contains "sub-section (1) of section 18 of the said Act".
Cited by (4)
Section 17, Central Goods and Services Tax Act, 2017 [S10-6HX], 12 April 2017, Band A. "section 18".
Rule 40, Central Goods and Services Tax Rules, 2017 [S10-EB9], 19 June 2017, Band A. "section 18".
Rule 43, Central Goods and Services Tax Rules, 2017 [S10-EF1], 19 June 2017, Band A. "section 18".
Rule 44, Central Goods and Services Tax Rules, 2017 [S10-EGT], 19 June 2017, Band A. "section 18".
Not held (0)
none
Duties published under this section (0)
none