Simple under of miscellaneous transitional provisions under GST
By: – CA.VINOD CHAURASIA
Goods and Services Tax – GST
Dated:- 29-8-2017
Introduction: This article attempts to simplify the miscellaneous transitional provisions under GST for better understanding.
Q1. Will CENVAT credit (or VAT credit) carried forward in the last return prior to GST under existing law be available as ITC under GST?
As per section 140(1) of CGST / SGST Act, 2017, a registered person, other than a person opting to pay tax under composition scheme, shall be entitled to take credit in his electronic credit ledger the amount of CENVAT (or VAT credit) Credit carried forward in the return of the last period before the appointed day, subject to the conditions stated therein.
Q2. What are those conditions?
The conditions are as below:
(i) the said amount of credit is admissible as input tax credit under this Act;
(ii) the registered person has furnished all the returns required under the ex
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e substantiated in the manner prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957.
Q3. A registered person, say, purchases capital goods under the existing law (Central Excise) in the June quarter of 2017-18. Though the invoice has been received within 30th June but the capital goods are received on 5th July, 2017 (i.e. in GST regime). Will such a person get full credit of CENVAT in GST regime?
Ans. Yes, he will be entitled to credit in 2017-18 provided such a credit was admissible as CENVAT credit in the existing law and is also admissible as credit in CGST section 140(2) of the CGST Act.
Q4. CENVAT credit was not available on items 'X' & 'Y' being capital goods in the existing law (Central Excise). Now they are covered in GST, can the registered taxable person claim it now?
Ans. He will be entitled to credit only when ITC on such goods are admissible under the existing law and is also admissible in GST. Since credit is not available under th
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red to be registered in GST. There will be no threshold for such person(s) under section 24 of CGST Act.
Q7. Will ITC be allowed to a service provider on VAT paid inputs held as stock on the appointed day?
Ans. Yes, he will be entitled to input tax credit on inputs held in stock in accordance with the provisions of section 140(3) of CGST Act.
Q8. A registered person has excess ITC of ₹ 10,000/- in his last VAT return for the period immediately preceding the appointed day. Under GST he opts for composition scheme. Can he carry forward the aforesaid excess ITC to GST?
Ans. The registered person will not be able to carry forward the excess ITC of VAT to GST if he opts for composition scheme Section 140(1) of CGST Act.
Q9. Sales return under CST (i.e. Central Sales Tax Act) is allowable as deduction from the turnover within six months? If, say, goods are returned in GST regime by a buyer within six months from appointed day, will it become taxable in GST?
Ans. Where tax has
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tion of job work after the appointed day?
Ans. No tax will be payable by the manufacturer or the job worker under the following circumstances:
* Inputs / semi-finished goods are sent to the job worker in accordance with the provisions of the existing law before the appointed day. The relevant sections are 141(1) & 141(2) of CGST Act.
The job worker returns the same within six months from the appointed day (or within the extended period of maximum two months). The relevant sections are 141(1) & 141(2) of CGST Act.
However as per section 142(8) of CGST Act, if the said inputs/semi-finished goods are not returned within six months (or within the extended period of maximum two months), the input tax credit availed is liable to be recovered.
However as per section 141(4) of CGST Act, If both the manufacturer and the job worker declare the details of inputs held in stock by the job worker on the appointed day in the prescribed form i.e. GST Form Tran-1, then above 3 conditions
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ayable if finished goods removed from factory prior to the appointed day to any other premise for carrying out certain processes are returned to the said factory after undergoing test or any other process within six months (or within the extended period of maximum two months) from the appointed day section 141 (3).
Q14. When tax shall become payable in GST on manufactured goods sent to a job worker for carrying out tests or any other process not amounting to manufacture under the existing law?
Ans. Tax will be payable in CST on manufactured goods sent to a job worker prior to the appointed day for carrying out tests or any process not amounting to manufacture under the existing law if such goods are not returned to the manufacturer within six months (or within the extended period of maximum two months) from the appointed day.
Further, as per section 141 (3), the input tax credit enjoyed by the manufacturer will liable to be recovered if the aforesaid goods are not returned within
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im of CENVAT or ITC on VAT which is pending under the existing law? If say, it relates to output liability then?
Ans. As per section 142(6) / 142(7), every proceeding of appeal, revision, review or reference relating to a claim for CENVAT/ input tax credit or any output tax liability initiated whether before, on or after the appointed day, will be disposed of in accordance with the existing law and any amount of credit of CENVAT/ input tax credit or output tax found admissible for refund will have to be refunded in cash in accordance with the existing law.
Q19. If the appellate or revisional order goes in favour of the assessee, whether refund will be made in GST? What will happen if the decision goes against the assessee?
Ans. As per section 142(6) / 142(7), the refund will be made in accordance with the provisions of the existing law in cash only. In case any recovery is to be made then, unless recovered under existing law, it will be recovered as an arrear of tax under GST.
Q2
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, under the existing law, an amount of tax, interest, fine or penalty becomes refundable. Shall such amount be refundable under the GST law?
Ans. As per section 142(8)(b), refund of such amount will be made in cash under the existing law.
Q24. If services are received by ISD under the earlier law, can the ITC relating to it be distributed in GST regime?
Ans. Yes, it can be distributed as section 140(7) of CSGT Act, irrespective of whether the invoice(s) relating to such services is received on or after the appointed day section 140(7) of the CGST Act.
Q25. Where any goods are sold on which tax was required to be deducted at source under State VAT law and an invoice was also issued before the appointed day, shall deduction of tax at source shall be made under this Act if the payment is made after the appointed day?
Ans. No, as per section 142(13) of CGST Act, in such case no deduction of tax at source shall be made under GST.
Q26. Goods were sent on approval not earlier than s
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