Text
The text below is the rule as served by the CBIC tax information portal on 17 September 2026, with the portal's own amendment footnote markers (shown as small numerals before a bracket) and its footnotes.[1] The Rules as published in the Gazette of India is the legal source.
Rule 44, verbatim (show)
Rule 44. Manner of reversal of credit under special circumstances.-
(1) The amount of input tax credit relating to inputs held in stock, inputs contained in semi-finished and finished goods held in stock, and capital goods held in stock shall, for the purposes of sub-section (4) of section 18 or sub-section (5) of section 29, be determined in the following manner, namely,-
(a) for inputs held in stock and inputs contained in semi-finished and finished goods held in stock, the input tax credit shall be calculated proportionately on the basis of the corresponding invoices on which credit had been availed by the registered taxable person on such inputs;
(b) for capital goods held in stock,the input tax credit involved in the remaining useful life in months shall be computed on pro-rata basis, taking the useful life as five years.
Illustration: Capital goods have been in use for 4 years, 6 month and 15 days. The useful remaining life in months= 5 months ignoring a part of the month Input tax credit taken on such capital goods= C Input tax credit attributable to remaining useful life= C multiplied by 5/60 1[(2) The amount, as specified in sub-rule (1) shall be determined separately for input tax credit of central tax, State tax, Union territory tax and integrated tax.
(3) Where the tax invoices related to the inputs held in stock are not available, the registered person shall estimate the amount under sub-rule (1) based on the prevailing market price of the goods on the effective date of the occurrence of any of the events specified in sub-section (4) of section 18 or, as the case may be, sub- section (5) of section 29.]
(4) The amount determined under sub-rule (1) shall form part of the output tax liability of the registered person and the details of the amount shall be furnished in FORM GST ITC-03, where such amount relates to any event specified in sub-section (4) of section 18 and in FORM GSTR-10, where such amount relates to the cancellation of registration.
(5) The details furnished in accordance with sub-rule (3) shall be duly certified by a practicing chartered accountant or cost accountant.
(6) The amount of input tax credit for the purposes of sub-section (6) of section 18 relating to capital goods shall be determined in the same manner as specified in clause (b) of sub-rule (1) and the amount shall be determined separately for input tax credit of 2[Central tax, State tax, Union territory tax and integrated tax]:
Provided that where the amount so determined is more than the tax determined on the transaction value of the capital goods, the amount determined shall form part of the output tax liability and the same shall be furnished in FORM GSTR-1 .
1. Substituted (w.e.f. 01.07.2017) by Notification No. 17 /2017-C.T., dated 27.07.2017.
2. Substituted (w.e.f. 01.07.2017) by Notification No. 15 /2017-C.T., dated 01.07.2017.
Questions to answer on the file
Questions a reviewer answers from the engagement file, grouped by the part of the rule they come from. They describe what the rule asks; they do not decide it.
stock reversal under the specified statutory events 44(1)
Questions to answer on the file4 questions
invoice-based stock input proportional arithmetic 44(1)(a)
Questions to answer on the file4 questions
corresponding invoice and proportion basis assessment 44(1)(a)
Questions to answer on the file5 questions
capital-goods remaining-life amount 44(1)(b)
Questions to answer on the file3 questions
remaining complete-month calendar assessment 44(1)(b)
Questions to answer on the file1 question
four-head separation for stock-event amounts 44(2)
Questions to answer on the file3 questions
missing-invoice prevailing-market-price estimate 44(3)
Questions to answer on the file8 questions
output-liability inclusion and event-specific form 44(4)
Questions to answer on the file7 questions
certification of missing-invoice estimate details 44(5)
Questions to answer on the file7 questions
section 18(6) capital-goods amount by the same method 44(6)
Questions to answer on the file3 questions
greater capital-goods amount output inclusion and GSTR1 44(6) proviso
Questions to answer on the file8 questions
separate input-tax heads for the section 18(6) amount 44(6)
Questions to answer on the file3 questions
interaction of the two prescribed section 18(6) reduction methods 44(6)
Questions to answer on the file1 question
Amendment history
The CBIC text carries 2 footnotes. The table gives each in the source's own terms. Effective dates are as the footnotes state them.[1]
| Note | Change |
|---|---|
| 1 | Substituted (w.e.f. 01.07.2017) by Notification No. 17 /2017-C.T., dated 27.07.2017.[2] |
| 2 | Substituted (w.e.f. 01.07.2017) by Notification No. 15 /2017-C.T., dated 01.07.2017.[3] |
Relationship with other provisions
| Provision | Connection | Words that tie them |
|---|---|---|
| Section 18 of the CGST Act, 2017 | Section 18 of the CGST Act, 2017 prescribed by this provision | 18(5) "shall be calculated in such manner as may be prescribed"; 18(6) "reduced by such percentage points as may be prescribed" |
| Section 29 of the CGST Act, 2017 | Section 29 of the CGST Act, 2017 prescribed by this provision | 29(5) "in such manner as may be prescribed" |
| Section 18 of the CGST Act, 2017 | this provision branches on Section 18 of the CGST Act, 2017 | 44(1) "for the purposes of sub-section (4) of section 18"; 44(6) "for the purposes of sub-section (6) of section 18" |
| Section 29 of the CGST Act, 2017 | this provision branches on Section 29 of the CGST Act, 2017 | 44(1) "or sub-section (5) of section 29" |
| Section 15 of the CGST Act, 2017 | this provision requires Section 15 of the CGST Act, 2017 | 44(6) proviso "tax determined on the transaction value of the capital goods"; 18(6) "determined under section 15" |
| Rule 40 | this provision requires Rule 40 | 44(6) "for the purposes of sub-section (6) of section 18"; Rule 40(2) "for the purposes of sub-section (6) of section 18" |
| Rule 81 | this provision requires Rule 81 | 44(4) "in FORM GSTR-10" |
| Rule 59 | this provision requires Rule 59 | 44(6) proviso "furnished in FORM GSTR-1" |
| Section 2 of the CGST Act, 2017 | this provision defined by Section 2 of the CGST Act, 2017 | 44(1) "inputs"; 44(1) "capital goods"; 44(4) "output tax liability" |
Circulars and notifications
Circulars and notifications in the CBIC repository that cite this rule, newest first, by number, date and subject. A listing here does not say what an instrument decides; read the instrument.
Circulars (1)
| Number | Date | Subject |
|---|---|---|
| Circular No. 231/25/2024-GST | 11 September 2024 | Clarification on availability of input tax credit in respect of demo vehicles. |
Notifications (9)
| Number | Date | Subject |
|---|---|---|
| Notification No. 30/2020-Central Tax | 3 April 2020 | Seeks to amend CGST Rules (Fourth Amendment) in order to allow opting Composition Scheme for FY 2020-21 till 30.06.2020 and to allow cumulative application of condition in rule 36(4). |
| Notification No. 21/2018-Central Tax | 18 April 2018 | Notification seeks to make amendments (Fourth Amendment) to the CGST Rules, 2017. |
| Notification No. 45/2017-Central Tax | 13 October 2017 | Seeks to amend the CGST Rules, 2017 |
| Notification No. 34/2017-Central Tax | 15 September 2017 | Seventh amendment to the CGST Rules, 2017. |
| Notification No. 22/2017-Central Tax | 17 August 2017 | Seeks to amend the CGST Rules, 2017 |
| Notification No. 17/2017-Central Tax | 27 July 2017 | Seeks to amend the CGST Rules, 2017. |
| Notification No. 15/2017-Central Tax | 1 July 2017 | Amending CGST Rules notification 10/2017-CT dt 28.06.2017 |
| Notification No. 10/2017-Central Tax | 28 June 2017 | Seeks to amend CGST Rules notification no 3/2017-Central Tax dt 19.06.2017 amended by a later instrument |
| Notification No. 03/2017-Central Tax | 19 June 2017 | Notifying the CGST Rules, 2017 on registration and composition levy amended by a later instrument |
Unsettled questions
The words of Rule 44 do not answer these questions. Where one decides a matter on the file, the answer depends on the position taken on it.
- What measure and allocation treatment makes the calculation proportionate for stock inputs traced to corresponding invoices, particularly mixed rates, units, losses or semi-finished/finished-goods input content? The rule does not prescribe a universal allocation measure or rounding convention.
- Which actual event anchors Rule 44 five-year useful life, and how are complete remaining months counted at calendar or leap-day boundaries? The rule states five years and illustrates ignoring the remaining part month, but does not expressly state the starting event or a general calendar algorithm.
- Which observations, comparable goods, date adjustments and tax/credit conversion make the estimate based on the prevailing market price? Rule 44(3) gives no numerical valuation or tax conversion method; certification is separately required.
- What makes the identified ITC details duly certified beyond the expressly named professional and practising-status conditions? The text fixes no certificate form, assurance wording or required examination procedure.
- How do the quarterly percentage-point reduction in Rule 40(2) and the remaining-month method imported by Rule 44(6) interact for the same section 18(6) supply, particularly when their figures differ? Neither rule states a priority or reconciliation rule.
See also
- Section 18 of the CGST Act, 2017: availability of credit in special circumstances
- Section 29 of the CGST Act, 2017: cancellation or suspension of registration
- Rule 40 of the CGST Rules, 2017: manner of claiming credit in special circumstances
- Rule 81 of the CGST Rules, 2017: final return
References
- Central Board of Indirect Taxes and Customs. "Rule 44. Manner of reversal of credit under special circumstances". Central Goods and Services Tax Rules, 2017, CBIC tax information portal, with amendment footnotes 1 to 2. Retrieved 17 September 2026.
- Notification No. 17/2017-Central Tax, dated 27 July 2017: Seeks to amend the CGST Rules, 2017. Cited in CBIC footnote 1.
- Notification No. 15/2017-Central Tax, dated 1 July 2017: Amending CGST Rules notification 10/2017-CT dt 28.06.2017. Cited in CBIC footnote 2.
External links
- CGST Rules, 2017, Rule 44 on the CBIC tax information portal