Tran 1 ITC - whether available on documents raised for inter stock transfer

[v n]

sir, this is a case of a trading firm which was not registered under c.ex and has multilocated depots pan india. they got registered under gst and filed tran 1under Sec 140(3) - but were denied credit taken on invoices/notes showing inter stock transfer from their depots to their firm by the dept , since technically inter stock transfer notes/invoices are not prescribed documents for the purpose of taking credit, though the goods were lying in stock as on 30.6.2017....pls advise.

[Ganeshan Kalyani]

The cenvat credit involved in the closing stock lying as at respective depots is eligible for TRAN-1 credit. The duty element involved in those goods need to be justified in this case. The stock transfer received from your own depot at another place. If that depot received Excise invoice from the supplier then the same can be co-related with the stock transfer invoice.

[KASTURI SETHI]

I agree with Sh.Ganeshan Kalyani Ji. The querist will have to labour hard regarding correlation. Only correlation is required which can clear the decks. Since it is a matter of TRANS-1, the word, 'prescribed docs' has not much relevance. You are to produce the evidence in support of stock lying on 30.6.17. Evidence may be in the form of books of accounts etc.

[v n]

Thanq very much sirs...

Reg prescribed document, the issue is that the credit is being claimed by a hyderabad unit and the invoices were in the names of their depots located pan india, and not in the name of the hyd unit...hence prima facie denial of credit by dept, though duty was duly paid ...the hyd unit has given an undertaking that no double credit on the document was availed...

Yes sir, as stated, cross verification of stock is the glitch here

Thanq once again sirs, for the guidance

[Ganeshan Kalyani]

You can identify the stock thru batch number or some code which you must have maintained. Yes, it is difficult for the department to accept it because midst of genuine dealer there are ill minded dealer whose aim is to claim credit by other mean. That is why department are not accepting this method of justification. However, the same will be in favour in appeal.

[v n]

Ok sir, thnq

AI Summary

Input Tax Credit on inter-stock transfers requires documentary correlation to substantiate duty and establish closing stock.
Credit under TRAN 1 may be claimed for excise duty embedded in closing stock at depots if the duty element is substantiated and correlated with the unit's records; prescribed document names are not decisive, and evidence such as supplier excise invoices, books of account, batch numbers, or internal codes and an undertaking against double credit are required to establish stock and duty as at the cut off date.