All you should know while filing Form GST TRAN-1 (Transitional Provisions)
By: – CASanjay Kumawat
Goods and Services Tax – GST
Dated:- 24-8-2017
The main objective of transitional provisions is to provide a safe cushion for existing taxpayers to adapt the new legislation without any shock. In the same lines, filing of GST TRAN forms is the second stage for persons under GST in the month of August, 2017. It is important to claim the benefits of ITC and save working capital needs of the persons.
There is lot of confusion among industry and trade on understanding of the transitional provisions as well as filing requirement of form GST TRAN, therefore this article is written to provide conceptual clarity on objective of transitional form and how to file this form along with data requirement and calculation mechanics for detailed field wise submission in this form.
The GST tax portal is likely to offer from 21st August, 2017 forms to claim credit on sales made or
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stock on the appointed day
FORM GST TRAN-1
Upto 30.09.2017 (within ninety days of the appointed day)
2.
Tax or duty credit on goods held in stock on the appointed day where taxpaying documents not available
FORM GST TRAN-2
Upto 31.12.2017 ( within six tax periods from the appointed date
3
Declaration to be made under clause (c) of sub-section (11) of section 142 , i.e., composite supply case under earlier taxation regime
FORM GST TRAN-1
Upto 30.09.2017 (within ninety days of the appointed day)
4.
Declaration of stock held by a principal and job-worker
FORM GST TRAN-1
Upto 30.09.2017 (within ninety days of the appointed day)
5.
Details of goods sent on approval basis
FORM GST TRAN-1
Upto 30.09.2017 (within ninety days of the appointed day)
Before understanding of the transitional provisions and this form minutely in its field wise requirement, first take a look at few important points in this regard:
* TRAN form needs to be filed by the persons who do want to claim
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15th August, 2017 and for the period January to March, 2017 was 25th April, 2017.
Field No. 5: Amount of tax credit carried forward in the return filed under existing laws
* Amount of Cenvat credit carried forward to electronic credit ledger as central tax (Section 140(1) and Section 140(4)(a))
Sl. no.
Registration no. under existing law (Central Excise and Service Tax)
Tax period to which the last return filed under the existing law pertains
Date of filing of the return specified in Column no. 3
Balance cenvat credit carried forward in the said last return
Cenvat Credit admissible as ITC of central tax in accordance with transitional provisions
1
2
3
4
5
6
Total
* This table has to be filed by all persons registered under GST (except composition dealers under GST laws.)
* This Part is to be filed in respect of only those taxes for which the dealer is registered under
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nbsp;
Total
F-Form
Total
H/I-Form
Total
* If goods were supplied under CST Act, details of claims and CST forms (C, F, H, I, E-I/E-II) shall be submitted within 90 days. Serial numbers of C and F forms and certificates in forms E, H F or I should be submitted in support of the claim.
Amount of tax credit carried forward to electronic credit ledger as State/UT Tax (For all registrations on the same PAN and in the same State)
C Forms
F Forms
H/I Forms
Registration No. in existing law
Balance of ITC of VAT and [Entry Tax] in last return
Turnover for which forms Pending
Difference tax payable on (3)
Turnover for which forms Pending
Tax payable on (5)
ITC reversal relatable to [(3) and] (5)
Turnover for which forms Pending
Tax payable on (7)
Transition ITC 2- (4+6-7+9)
&nbs
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to the extent of inter-state supplies which are not substantiated cannot be carried forward. Hence, balance credit can be claimed as transitional credit.
* Accordingly, in case of inter-state sales, if the recipient issues Form C and other forms, i.e., F, H, I or J, or E-II, then CST rate is 2 percent. If the form is not received then CST payable is equal to state VAT rate. Thus, if VAT rate is 20 percent and no forms have received then CST rate would be 20 percent. Therefore, in case where, no required form has been received upto 30.09.2017 in respect to inter-state sales made as on 30.06.2017. In that case, the claim is not substantiated. Hence, the credit of VAT equal to difference between 20 percent and 2 percent will not be eligible for carry forward.
* It may be noted in case where such person is not engaged in inter-state sale then there is no restriction to carry forward the VAT credits to in GST regime.
* It may further be noted that credit of CST shall not be allowed to
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Amount of unavailed input tax credit carried forward to electronic credit ledger as State/UT tax (For all registrations on the same PAN and in the same State)
Sr.
Invoice / Document
Invoice / document
Recipients' registration no. under existing
Details of capital goods on which credit is not availed
Total eligible VAT [and ET] credit under existing
Total VAT [and ET] credit availed under existing law
Total VAT [and ET] credit unavailed under existing law (admissible as ITC of State/UT tax) (8-9)
Taxes paid VAT [and ET]
*
* Section 140(2) : A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in respect of capital goods, not carried forward in
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al goods may not have been availed. Therefore, in such cases, unavailed credit on capital goods, not carried forward in return filed for June 2017, can be availed.
Field No. 7 : Details of the inputs held in stock in terms of sections 140(3), 140(4)(b), 140(5) and 140(6).
* Amount of duties and taxes on inputs claimed as credit excluding the credit claimed under Table 5(a) (under sections 140(3), 140(4)(b) and 140(6))
Kindly refer TRAN Form
* Section 140(3) : Readers may refer given link for detailed understanding of section 140(3) of CGST Act, 2017 for Central levies.
* https://www.linkedin.com/pulse/credit-unsold-stock-under-section-1403-cgst-act-2017-kumawat?published=t
* Section 140(4)(b): A registered person, who was engaged in
* the manufacture of taxable as well as exempted goods under the Central Excise Act, 1944, or
* provision of taxable as well as exempted services under Chapter V of the Finance Act, 1994, but which are liable to tax under this Act,
sha
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day.
Amount of eligible duties and taxes/VAT/[ET] in respect of inputs or input services under section 140(5):
Kindly refer TRAN Form
* Section 140(5) : A registered person shall be entitled to take credit of eligible duties and taxes in respect of inputs or input services received on or after the appointed day but the duty or tax in respect of which has been paid by the supplier under the earlier law, subject to the condition that the invoice or any other duty or taxpaying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day.
* It is possible that the supplier has prepared invoice and despatched goods prior to 30-06-2017, but the goods were received after 30-06-2017. It is also possible that service was provided prior to 30-06-2017 but invoice was received after 01-07-2017 but before 30-07-2017. In such cases, input tax credit will be available. Credit of duty paid inputs or service tax paid on input serv
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ned in semi-finished or finished goods held in stock on the appointed day, relating to such exempted goods or tax free goods in accordance with the provisions of section 140(3) of SGST Act, 2017.
Stock of goods not supported by invoices/documents evidencing payment of tax (credit in terms of rule 117 (4)) (To be there only in States having VAT at single point) [ Note : Details of description and quantity of inputs / input services as well as date of receipt of goods or services (as entered in books of accounts) is also required.]
Kindly refer TRAN Form
* This option is available for the cases in which registered person wants to claim transitional credit for the MRP based goods for which taxpaying documents is not available.
Field No. 8: Details of transfer of cenvat credit for registered person having centralized registration under existing law (Section 140(8))
Kindly refer TRAN Form
* Taxable person having centralized registration under service tax can take input tax credit w
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ods and finished goods outside before 01-07-2017 for job work or testing. If these are received back before 31-12-2017, GST will not be payable.
* If goods or capital goods of principal are lying with agent on 30-06-2017, the agent can take input tax credit of state VAT paid on such inputs or capital goods. Declaration is to be given in above tables.
Field No. 10: Details of goods held in stock as agent on behalf of the principal under section 142 (14) of the SGST Act
* Details of goods held as agent on behalf of the principal
Kindly refer TRAN Form
Details of goods held by the agent
Kindly refer TRAN Form
* Where any goods or capital goods belonging to the principal are lying at the premises of the agent on the appointed day, the agent shall be entitled to take credit of the tax paid on such
* goods or capital goods subject to fulfilment of the following conditions:
* the agent is a registered taxable person under SGST Act;
* both the principal and the agent declare t
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s were sent on approval basis and were not with the taxable person on 01-07-2017, details are to be submitted in table 12 of the GST TRAN-1. The goods should be returned before 31-12-2017. If these are returned after 6 months, GST will be payable.
* Every person having sent goods on approval under the existing law and to whom sub-section (12) of section 142 applies shall, within ninety days of the appointed day, submit details of such goods sent on approval in FORM GST TRAN-1.
Conclusion
These are the important steps or filed to fill this form. Since window for filing of GST TRAN is already opened.
CA Sanjay Kumawat
(For any feedback or queries write to casanjay.kumawat91@gmail.com.)
Reply By CASanjay Kumawat as =
Que. A vat dealer who is having excise bills can fill TRAN-1 part 7(a) and he will get the actual credit.
Reply: Yes, he will get the credit of eligible duties and details is to be filed in table 7(a).
Dated: 25-8-2017
Reply By CASanjay Kumawat as =
Que. A vat
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ed day. This provision is notwithstanding anything contained contrary to CGST Act.
Now pl provide guidance that an ISD receiving invoices relating to services received in June,2017 in August 20, 2017 after he has already filed his ST3 return for the quarter June,2017, then how he will be able to transfer such credit in new regime? The Trans 1 has no column for section 140(7).
Dated: 25-8-2017
Reply By R.S. Mangal as =
If an manufacturer has the credit of Cenvat Credit balance as on 30.06.2017 for carried forward but does not any credit available for VAT, then whether the details related to C,F,I,H form received from 01.04.2015 till 30.06.2017 or pending of such forms is required to be disclosed in Trans 1. In our view if no VAT credit is to be carried forward then such details is not required to be mentioned. There are contrary views also in market.
What is the legal position, can you guide.
regards
Dated: 25-8-2017
Reply By CASanjay Kumawat as =
Question.
As per Section 140
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carried forward but does not any credit available for VAT, then whether the details related to C,F,I,H form received from 01.04.2015 till 30.06.2017 or pending of such forms is required to be disclosed in Trans 1. In our view if no VAT credit is to be carried forward then such details is not required to be mentioned. There are contrary views also in market.
What is the legal position, can you guide.
Reply: Forms detail is required to be given only in case when assessment is pending for the forms/turnover and not in all cases. It may be noted that in case if you do not want to carry forward the VAT credits then there is no any requirement of filing of forms in TRAN-1 form.
Dated: 25-8-2017
Reply By R.S. Mangal as =
Question.
As per Section 140(7), an ISD can distribute the Input tax Credit on account of any services received prior to appointed day by it even if invoices relating to such services are received after the appointed day. This provision is notwithstanding anything cont
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ific provision under Section 140(7) of CGSt Act.
Pl advise.
regards
By: CASanjay Kumawat
Dated: 25-8-2017
Reply By CASanjay Kumawat as =
Sir, Section 140(7) starts from the non-obstante clause, i.e., “(7) Notwithstanding anything to the contrary contained in this Act, the input tax credit…………..”. Therefore, in my view, you can carry forward the credit by revising your service tax return.
Dated: 25-8-2017
Reply By Prateek Diwan as =
Can second stage dealer take the credit of excise dudy paid by him to first stage dealer…if FSD provide its purchase bill evidencing payment of duty by him..??
Dated: 26-8-2017
Reply By CASanjay Kumawat as =
Yes, second stage dealer can take the credit of eligible duties including excise duty. Legal reference : Section 140(3) of the CGST Act, 2017.
Dated: 26-8-2017
Reply By Manoj Kasture as =
A builder has construction WIP. This is construction completed for unsold flats. Can he take credit of the ED and VAT which is par
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second stage dealer take the credit of excise dudy paid by him to first stage dealer…if FSD provide its purchase bill evidencing payment of duty by him..??
By: Prateek Diwan
Dated: 26/08/2017
Yes, second stage dealer can take the credit of eligible duties including excise duty. Legal reference : Section 140(3) of the CGST Act, 2017.
By: CASanjay Kumawat
Dated: 26/08/2017
Is it also complusory to tranfer that credit of excise duty received by STD on the submition of bill received from FSD…to the receipt of goods to whome we sale furthe? and at which rate 100% or 60% ( as that bill is at the name of FSD)
along with this cn we also claim input of VAT in our SGST credit ledger..mention on the bill raised by FSD on us?( both credit cn be take together)
Dated: 26-8-2017
Reply By Amit Choudhary as =
Being an importer if i have only CVD & SAD as closing stock ITC which i sm claiming under 7 a in TRAN 1 and i had made central sales under the cover of C Form, but
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.
i have closiing stock with VAT invoices..
Which form to file…Tran 1 or tran 2
if tran 1 then which column
if tran 2 then which column?
Dated: 31-8-2017
Reply By Sumit Poddar as =
Dear sir
We are a manufacturer of Auto Parts and availing ssi benifits and was not registered under central exixse… We have finish stock lying with us on 30/06/2017 but we donot have any Duty paid document.
Can we avail the benifit of 30% of IGST under gst
Dated: 1-9-2017
Reply By R.S. Mangal as =
No because such benefit is not available to manufacturer or service provider unless he has duty paying documents . Refer proviso to Section 140(3) of CGST Act, 2017.
Dated: 2-9-2017
Reply By ASKARUDHEEN Askarudheen as =
A trader Registered in VAT and on 30-06-2017 vat refundable RS 50450 (only taxable goods) ( all Monthly Return is filled)
Then my doubt is whether I fill only Field No 5 or fill both field 5 and 7?
Dated: 20-10-2017
Reply By Sumit Poddar as =
There is some point to be under
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standing correct with respect to claiming the excise on such unsold stock in GST transition provisions.
– He has to file only TRANS 1 (7a). No other section of Trans 1 are to be filled.
– He is not required to file TRANS 2 at all.
– He will get full actual credit of Excise Duty paid on unsold stock in the electronic credit ledger. Notional credit of 60/40 is not applicable.
– He has to file the Trans 1 by 28.12.2017
– He can sell the unsold stock for indefinite period of time in 2018/2019. Restriction of selling the stock until 31.12.2017 is not applicable to them.
– He can claim the benefit of above transition credit against the GST tax liability of other stock items.
Pls advice if above understanding is correct .
regards
SSKumar
Dated: 27-1-2018
Reply By Rakesh Bansal as =
Sir, can an existing registered dealer claim the transitional credit for the input services received prior to appointed day and the invoice for which has been received after appointed day. He has not t
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