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.
Independent Practitioner’s 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 and Rule 40(1)(d) of the rules issued under such Acts
Name and Address of the Applicant
1. This Certificate is issued in accordance with the terms of our agreement dated ………….
2. 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 in the State/s of ________.
The principal place of business and the additional places of business in the State of ______ have been duly registered with effect from ____________.
3. 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.
4. 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. __________ by declaring the same, electronically, on the common portal in Form GST ITC-01 (hereinafter referred to as the “Statement”) The details furnished in the above statement shall be duly certified by a practicing chartered accountant or a cost accountant where the aggregate claim exceeds Rs. 2 Lakhs.
Management’s responsibility for the Statement:
5. The preparation of the statement and declarations in relation to the stock required in terms of the CGST and SGST Acts and Rules issued under the said Acts, is the responsibility of the Management of…………………………….. [Name of the Applicant] including the preparation and maintenance of all accounting and other relevant supporting records and documents. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the statements and declaration (including physical verification of stock) and applying an appropriate basis of preparation; and making estimates that are reasonable in the circumstances.
The management is also responsible for ensuring that the Applicant complies with the requirements of CGST / SGST Act and CGST /SGST Rules.
6. Pursuant to the requirements of Section 18(1)(d) of the SGST / CGST Act read with Rule 40(1)(d) of the CGST / SGST Rules, 2017, it is our responsibility to provide a reasonable assurance that the amounts declared in the Form GST ITC-01 have been accurately drawn from the books of accounts and other relevant documents / records of the Applicant and is claimed as input tax credit;
We conducted our examination of the Statement in accordance with the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India.
We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.
7. Based on our examination as above and the information and explanations given to us, in our opinion, subject to our remarks / comments in para 7 infra, the particulars declared by the Applicant is provided in Appendix A are true and correct and in conformity with the books of accounts and other relevant documents/ records maintained under the CGST Act and the SGST Act.
8. 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.
9. Remarks / comments (Refer Para 5 supra):
(a) Management has conducted physical verification on …….. method and based on review of the observations in that exercise and the treatment of those observations in the books of accounts, it is found that inputs stated to be held in stock on the date immediately preceding …….., the date on which Management stated to be liable to pay tax under SGST / CGST Act, are verifiable and free of observable differences except to the extent of ……….
(b) Based on the same exercise subject to derivative data in respect of inputs contained in verified quantities of semi-finished or finished goods held in stock on that date and as certified by Management are also verifiable and free of observable differences except to the extent of ……
(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.
Restriction on Use
10. This certificate is addressed and provided to the ……..of the Applicant solely for the purpose of submission to (name of the authority) pursuant to the requirements of Section 18(1)(d) of the SGST / CGST Act read with Rule 40(1)(d) of the CGST / SGST Rules, 2017 and should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or duty of care for any other purpose or to any other person to whom this certificate is shown or into whose hands it may come without our prior consent in writing.
For XYZ and Co.
Firm’s Registration Number
Place of Signature: _____________
(Name of the Member Signing the Certificate)
Membership Number: ______