Goods and Services Tax – GST – By: – CASanjay Kumawat – Dated:- 24-8-2017 Last Replied Date:- 30-3-2018 – 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 services rendered before the rollout of GST, which the taxpayers
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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 transitional credit. It needs to be filed online only at the common portal i.e. www.gst.gov.in. T
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x 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 existing laws. (eg. VAT/Excise/Service Tax etc.) Section 140(1): A registered person shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending
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f 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) If the taxable person was engaged in inter-state sale, the credit as is attributable to any claim related to section 3, 5(3), 6, 6A or 8(8) of the CST Act, 1956 which is not substantiated in the manner, and within the three months after end of the period (quarterly for form C) to which it relates, specified in Rule 12 of the CST (Registration and Turnover) Rules, 1957 shall not be eligible to be credited to the electronic credit ledger. [Second proviso to section 140(1) of the SGST Act, 2017]
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laim 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 carry forward in GST regime. Field No. 6 : Details of capitals goods for which unavailed credit has not been carried forward under existing law (section140 (2)). Amount of unavailed CENVAT credit in respect of capital goods carried forward to electronic credit ledger as central tax Sr. Invoice / Document Invoice / document Supplier s registration no. under existing Recipients registration no. under existing Details of capital goods on which credit has been partially availed Total eligible cenvat credit under existing Total cenvat credit availed under existing Total cenvat credit unavailed under existing law (admissible as I
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after subtracting the amount of CENVAT credit already availed in respect of capital goods by the taxable person under the existing law from the aggregate amount of CENVAT credit to which the said person was entitled in respect of the said capital goods under the existing law. The registered person shall not be allowed to take credit unless the said credit was admissible as CENVAT credit under the existing law and is also admissible as input tax credit under GST Act. In Central Excise, CENVAT Credit of capital goods is available in two years, i.e., 50 in first year and balance 50 percent in next year. In some states, VAT credit is allowed in 2-3 years. In such cases, it may be possible that some input tax credit of excise duty, State VAT or entry tax and other eligible duties paid on capital 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
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to such exempted goods or services, in accordance with the provisions of section 140(3) (kindly refer to the above given link). Section 140(6): A registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the existing law shall be entitled to take credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day. It may be noted that the said registered person is in possession of invoice or other prescribed documents evidencing payment of duty under the existing law in respect of inputs. Such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed 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 r
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nputs supported by invoices/documents evidencing payment of tax carried forward to electronic credit ledger as SGST/UTGST 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 SGST Act, 2017 for State levies. Link: https://www.linkedin.com/pulse/credit-unsold-stock-under-section-1403-sgst-act-2017-kumawat Section 140(4)(b): A registered person, who was engaged in the sale of taxable goods as well as exempted goods or tax free goods under the earlier law but which are liable to tax under GST Act, shall be entitled to take the credit of the value added tax, if any, in respect of inputs held in stock and inputs contained 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 t
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ods sent to job-worker and held in his stock on behalf of principal under section 141 Details of goods sent as principal to the job worker under section 141 -Kindly refer TRAN Form Details of goods held in stock as job worker on behalf of the principal under section 141 -Kindly refer TRAN Form Every person to whom the provisions of section 141, i.e. principal and job worker relationship apply shall, within ninety days of the appointed day, submit a declaration electronically in above table wherein details of the stock of the inputs, semi-finished goods or finished goods, as applicable, held by him on the appointed have is to be specified. A taxable person might have sent inputs, semi finished goods 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 capi
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inted day; and the principal has either reversed or not availed of the input tax credit in respect of such,- goods; or capital goods or, having availed of such credit, has reversed the said credit, to the extent availed of by him. Field No. 11: Details of credit availed in terms of Section 142 (11 (c)) -Kindly refer TRAN Form For detailed understanding of section 142(11)(c), reader may refer given below link: https://www.linkedin.com/pulse/service-tax-vat-v-goods-services-section-14211-cgst-act-kumawat Field No. 12: Details of goods sent on approval basis six months prior to the appointed day (section 142(12)) -Kindly refer TRAN Form If goods 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 secti
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in respect to stock which you have sold. – Reply By CASanjay Kumawat – The Reply = Que. A builder having both vat and excise bills will show them in TRAN-1 part 7(a) and 7(b)? Reply: Yes, builder can show but this should be in compliance with the conditions specified in section 140(3) of the CGST/SGST Act, 2017 read with Rule 117 of the CGST/SGST Rules, 2017. – Reply By R.S. Mangal – The Reply = 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 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). – Reply
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d 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). Reply In my view, ISD has to revise the return and claim the credit with reference to the section 140(1) of the CGST Act, 2017. In TRAN-I, this claim is to be shown in Table No. 5(a). This credit is to be claimed in Table No. 8 of the GSTR-2 and in GSTR-3B, in all other ITC of Table No. 4. – Reply By CASanjay Kumawat – The Reply = Que. 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. Reply: Forms detail is re
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Act, 2017. In TRAN-I, this claim is to be shown in Table No. 5(a). This credit is to be claimed in Table No. 8 of the GSTR-2 and in GSTR-3B, in all other ITC of Table No. 4. Q Thanks Sanjayji, I still have doubt because as per Section 142(9)(b) of CGST Act,2017 , where any return furnished under the erstwhile CE or Finance Act is revised and if pursuant to such revision Cenvat Credit is found admissible then same shall be refunded under old laws. But question is how an ISD will get the refund or whether still it can transfer credit in view of specific provision under Section 140(7) of CGSt Act. Pl advise. regards By: CASanjay Kumawat – Reply By CASanjay Kumawat – The Reply = 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. – Reply By Prateek Diwan – The Reply = Can second stage
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is providing construction services cannot take the credit of inputs or input services. However a contractor can take if he was paying service tax under abatement scheme. – Reply By CASanjay Kumawat – The Reply = With reference to section 142(9)(b) of the CGST Act, credit admissible after revision of return will be refunded. Therefore, you may not carry forward the same through TRAN -1. – Reply By Prateek Diwan – The Reply = Continued from previous post 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..?? 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
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osing stock, So please tell me whether i have to file tran 1 or tran 2 ? – Reply By CASanjay Kumawat – The Reply = If you are registered under GST Act then you may file Tran-1 or tran-2, as the case may be , for the purpose of claim of credit in respect to stocks lying as on 30.06.2017. – Reply By vaishali shah – The Reply = Yes.. registered under GST but not reg under previous laws… 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? – Reply By Sumit Poddar – The Reply = Dear sirWe 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 – Reply By R.S. Mangal – The Reply = No because such benefit is not available to manufacturer or service provider unless he has duty paying documents . Refer proviso to Section 1
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table no 5. – Reply By dixita dhaduk – The Reply = Hello Sir, I would like to know how to open the submitted TRANS-1 Form? – Reply By Sushil Kumar – The Reply = Dear Sir, For a VAT dealer who is actually the first stage dealer is holding tax invoice containing excise duty for the purchases lying in stock on 30.06.2017. Is my understanding 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 st
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