Transition Provisions under GST
GST Law and Procedure – GST Law and Procedure [January, 2019]
GST
Chapter Twenty
Transition Provisions under GST
GST is a significant reform in the field of indirect taxes in our country. Multiple taxes levied and collected by the Centre and States have been replaced by one tax called Goods and Services Tax (GST). GST is a multi-stage value added tax on consumption of goods or services or both.
As GST sought to consolidate multiple taxes into one it was very essential to have transitional provisions to ensure that the transition to the GST regime is very smooth and hassle free and no ITC (input tax credit) / benefits earned in the existing regime are lost. The transition provisions can be categorized under three heads:
a) relating to input tax credit
b) Continuance of existing procedures such as job work for a reasonable period without any adverse consequence under GST law.
c) All claims (pending as well as future) pertaining to existing l
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
it on capital goods:
The balance instalment of un-availed credit on capital goods credit can also be taken by filing the requisite declaration in the GST TRAN 1.
c) Credit on duty paid stock:
A registered taxable person, other than manufacturer or service provider, may have a duty paid goods in his stock on 1st July, 2017. GST would be payable on all supplies of goods or services made after the appointed day. It is not the intention of the Government to collect tax twice on the same goods. Hence, in such cases, it has been provided that the credit of the duty/tax paid earlier would be admissible as credit. Such credit can be taken as under:
i. credit shall be taken on the basis of invoice evidencing payment of duty of excise or VAT.
ii. such invoices should be less than one-year old.
iii. declare the stock of duty paid goods within prescribed time on the common portal.
d) credit on duty paid stock when registered person does not possess the document evidencing payment of exc
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
in each of six tax period has to be submitted
v. Stocks stored should be easily identifiable.
e) Credit relating to exempted goods under the existing law which are now taxable.
Input Tax Credit of CENVAT / VAT in respect of input, semi-finished and finished goods in stock attributable to such exempted goods or services which are now taxable can also be taken in the same manner.
f) Input /input services in transit:
There might be a scenario where input or input services are received on or after the appointed day but the duty or tax on the same was paid by the supplier under the existing law. Registered person (RP) may take credit of eligible duties and taxes, provided the invoice has been recorded in the books within 30 days from 1st July, 2017. The period can be extended by the Commissioner GST by another 30 days. A statement of such invoices have to be furnished. ISD can also distribute such credit.
g) Tax paid under existing law under composition scheme:
Those taxpayers who p
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
hich the centralized registration was obtained.
i) Reclaim the reversed Input Service credit:
CENVAT credit reversed on account of non-payment of consideration within three months can be reclaimed if payment is made to the supplier of service within 3 months from 1st July, 2017
j) Where any goods or capital goods belonging to the principal are lying at the premises of the agent on the Appointed Day:
This provision is specific to SGST law. In such cases, agent shall be entitled to take credit subject to the following conditions:
i. the agent is a registered taxable person
ii. both the principal and the agent declare the details of stock
iii. the invoices are not earlier than twelve months
iv. the principal has either reversed or not availed of the input tax credit.
b) Transition provisions relating to job work, goods returned/ sent on approval etc.:
a) Job work: –
Inputs, semi-finished goods or finished goods were sent to the job worker or any other premises without paymen
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
returned by a registered person, then return of goods shall be treated as supply of goods (ITC can be claimed)
c) Goods sent on approval basis before 6 months of the appointed day i.e. 1st July, 2017 but returned within 6 months from 1st July, 2017:
No tax is payable by the person returning the goods. Commissioner may extend the period by 2 months. If returned after that, tax is payable if the supply is taxable under GST (by the recipient. If not returned, tax is payable by the person who sent the goods on approval basis.
d) TDS deducted in VAT
Where a supplier has made any sale of goods and tax was required to be deducted under VAT Act and Invoice was issued before the appointed day, however, the payment was made on or after appointed day. In such cases no TDS under GST is to be deducted.
e) Price revision in respect of existing contracts
In case of upward price revision, a registered person will issue a supplementary invoice or debit notes within 30 days from the date of revi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =