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CS Executive · Tax Laws and Practice · Concept of Indirect Taxes at a Glance

Mehta Traders, a registered first stage dealer, held inputs on the appointed day and seeks credit of eligible duties under Section 140(3). Which condition is stated in that sub-section?

The invoices or other documents evidencing duty payment must have been issued not earlier than twelve months immediately preceding the appointed day. This is condition (iv) of Section 140(3). The six-month period relates to returns under sub-section (1), and the inputs must be for taxable supplies.

  1. AThe invoices evidencing duty payment were issued not earlier than twelve months immediately preceding the appointed dayCorrect
  2. BThe invoices were issued not earlier than six months before the appointed day
  3. CThe inputs must be wholly used for making exempt supplies
  4. DThe dealer must have opted to pay tax under section 10

Explanation

Section 140(3)(iv) requires invoices or prescribed documents issued not earlier than twelve months immediately preceding the appointed day. Six months relates to returns in sub-section (1). Inputs must be for taxable supplies, and section 10 composition persons are excluded.

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