Transitional Credit Under GST Not Allowable For Capital Goods Received After 1 July 2017: Patna HC Upholds Recovery Of Ineligible CENVAT Credit

The Patna High Court ruled that transitional credit under GST is not allowable for capital goods received after July 1, 2017. The court interpreted the transitional provisions of the GST law and held that the credit for input tax paid under the previous regime is available only for goods held in stock or received before the implementation date of GST. Capital goods received after this date are subject to the regular GST input tax credit rules. This ruling clarifies the eligibility criteria for claiming transitional credit on capital goods and has implications for businesses that had procured capital assets around the GST implementation period.