Payment of GST against outward supplies of July'17

[MohanLal tiwari]

Dear Experts,

Your expert advise is requested regarding payment of GST against outward supplies of July'17 and utilizing credit of ITC against inward supplies of July and Cenvat credit for which required ER-1 has been filed.

[RAMESH PRAJAPATI]

It has been informed by GST twitter of GOI that credit can be used for payment of tax. Please declare credit in GSTR-3B and utilize for payment. There is no opening and closing balance column in GSTR-3B so you have to show it as credit taken.

[MohanLal tiwari]

Thanks Mr Prajapati,

1st of all tweeter can not be considered as an authority to quote. Moreover, as per format, we need to pay GST prior to filing GSTR-3B. How one can utilize ITC before before filing GST-3B.

Further, what will happen to the clear Cenvat & VAT credit.

Awaiting expert opinion and guidance from Mr Kasturi Sethi & Mr Rajgopalan as we have more than 2.5 crore credit and GST payable for July is 1.35 crore.

[Himansu Sekhar]

To take the closing balance of June return, tran 1 form to be filed. It can not be carried to gstr3b without tran 1

[Rajagopalan Ranganathan]

Sir,

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. (Section 140(1) of the CGST/SGST Act. The conditions are that: -

(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 existing law (i.e. Central Excise and VAT) for the period of six months immediately preceding the appointed date;

(iii) the said amount of credit does not relate to goods sold under notifications no. ……and claiming refund of VAT paid thereon

Under SGST law there will be one more condition as given below: -

So much of the said credit as is attributable to any claim related to section 3, sub-section (3) of section 5, section 6, section 6A or sub-section (8) of section 8 of the Central Sales Tax Act, 1956 that is not substantiated in the manner, and within the period, prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 shall not be eligible to be credited to the electronic credit ledger:

However, an amount equivalent to the credit specified above shall be refunded under the existing law when the said claims are substantiated in the manner prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957.

Subject to the above you can avail the credit available under erstwhile Central Excise Law and VAT law of the respective State.

As per rule 117 (1) of CGST Rules, 2017, to avail the credit you have to submit a duly signed declaration electronically on common portal in Form GST TRAN-1.

[KASTURI SETHI]

I support the views of Sh.Ranganathan Sir and Sh. Himanshu Sha Ji.

I have observed that most of inward supply invoices have not been uploaded in common portal which was to start from 5.8.2017. TRANS-1 is required to be filled up by 31.8.2017. One of my clients has also faced such problem due to non-filing of TRANS-1 and non-uploading of inward supplies invoice by their supplier. Final return is GSTR 3. If all the inward supply invoices are uploaded and TRANS-1 is uploaded, the system will automatically give due benefit after auto rectification.

Inward supply invoices (cenvatable invoices) are like cheques and if cheques are not deposited in your bank account, you cannot use that amount.

[Ganeshan Kalyani]

Credit of excise and VAT will be carry forward by way of last return and by way of TRAN 1. If neither is filed then old credit will not be available for utilisation. Only the current month purchase under GST is eligible for credit.

[Hariharan Sundaram]

Kindly refer to the press release of MOF dated 19.08.2017 and the facility of taking transitional credit as on 30.06.2017 has been made available with effect from 21.08.2017 by filing TRANS 1 and for those who are willing to availing this facility of transitional credit the due date for filing GSTR 3B is extended up to 28.08.2017

AI Summary

Transitional input tax credit requires TRAN-1 filing before utilisation in GSTR-3B to migrate legacy CENVAT/VAT credits. Transitional CENVAT/VAT credit may be utilised for GST liabilities only after meeting statutory eligibility and procedural conditions: the credit must be admissible as input tax credit, requisite past-period returns under existing laws must be filed, and the recipient must submit the prescribed declaration in TRAN-1 so that eligible legacy credit migrates to the electronic credit ledger; inward-supply invoices must be uploaded by suppliers. Without carryforward via last return or TRAN-1, legacy credits are not available and only current-period GST purchases are eligible for credit.