Check Points of Section 18(1)(a) of the GST Act

Section 18(1)(a) of the GST, 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.

Check Points

(i) Verify registration particulars with the Registration Certificate.

(ii) Do not take responsibility for filing the respective statutory form prescribed as the same is the responsibility of Management. Auditor’s responsibility is to issue the above certificate and attest the information in Appendix A of the certificate.

(iii) Check the books and records and other relevant documents and registers relating to quantity and value of inputs lying in stock and inputs contained in semi-finished or finished goods on the date immediately preceding the date from which he becomes liable to pay tax under the SGST / CGST Acts, 2017. Eligibility of such credits also needs to be checked under Section 16 and Section 17 of the CGST / SGST Acts, 2017.

(iv) Check the basis of ‘derived’ data of equivalent units of inputs contained in semi-finished and finished goods in stock.

(v) Statement of bills of entry / tax invoices attributed by Management to be the goods in stock that are not be older than 1 year on the day on which the Applicant is liable to pay tax (Section 18(2) of the CGST / SGST Acts, 2017) may be collected from the Management and subjected to audit verification tests. The tax invoice must be the one containing the prescribed particulars (Section 16(2) of the CGST / SGST Acts, 2017 to be read with Rule 46 of the CGST / SGST Rules, 2017).

(vi) Ensure that the debit notes / credit notes, if any, are recorded / accounted against the vendor invoice which are forming part of the closing inventory.

(vii) This certificate is required to be issued only if the aggregate value of the claim on account of SGST / CGST / UTGST and IGST exceeds rupees two lakhs (Rule 40 (1)(d) of the CGST / SGST Rules, 2017)

(viii) This certificate is to be suitably modified wherever applicable. The names of the registered persons, dates, addresses etc. are only illustrative and needs to be modified in each case. Any resemblance to any person / place is purely unintentional. For example: – If Physical Verification of stock is not carried out then, suitably qualify.

(ix) Ensure that the certificate issued is in accordance with the Guidance note on Reports and Certificates for special purpose issued by the ICAI.

(x) Ensure that a letter of representation is taken from the management for the details and information provided by them.

(xi) No ITC must be availed in respect of capital goods and input services and the Certificate must be issued only for ITC for inputs

Priyansh Minocha

Priyansh Minocha is C.E.O and Director at Amonest India Private Limited and Founder at Casolutionsglobal

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