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

Under the transitional provisions of the CGST Act, 2017 (Section 140), which of the following is listed as an 'eligible duty' for taking credit in respect of inputs held in stock on the appointed day?

The additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975 is an eligible duty. Explanation 1 to Section 140 names it explicitly, while basic customs duty, State VAT and entertainment tax do not appear in the list of eligible duties.

  1. ABasic customs duty paid on imported finished goods sold in the domestic market
  2. BAdditional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975Correct
  3. CState value added tax paid on local purchases
  4. DEntertainment tax paid by a multiplex operator

Explanation

Explanation 1 to Section 140 lists, among eligible duties, the additional duty leviable under section 3(5) of the Customs Tariff Act, 1975, along with the additional duty under section 3(1), excise duties and NCCD. Basic customs duty, State VAT and entertainment tax are not in the list.

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