Transitional Credit u/s 140 of GST Act

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my client's executing works contract in Tamil Nadu and had been paying taxes u/s 5 of TNVAT Act,2006. Further, he has huge credit of WCT TDS under the erstwhile act which could be adjusted only upon liability arises at the time of filing the return under the TNVAT Act,2006 after exhausting the Input Tax Credit.

As per the GST Act, we can carry forward the credit which is reflecting in the june,2017 and transfer through filing TRAN-1 return, whereas TDS credit apart from excess ITC the said WCT TDS was not reflected.

However, the client was availed the legitimate credit through TRAN-1 which has been objected by the State authority and issued a notice to the client. Since, the Tamil Nadu Sales Tax authority has created and design the Website which was convenient for them on the contrary my client is suffering and the working capital is blocked.

Now, im decided to file a writ petition before the high court of madras to defend this issue.

Could any experts give opinion on this and also share if any citation on this.

Thanks in Advance.

AI Summary

Transitional GST credit carryforward contested after WCT TDS claimed via TRAN 1 was objected and notices issued.
Transitional credit under Section 140 was claimed via TRAN 1 to carry forward WCT TDS and other pre GST credits; the State authority objected that WCT TDS was not reflected in its system and issued notices demanding repayment and penalties. The taxpayer filed a writ; the court directed the authority to pass a decision and did not grant relief at the notice stage, leaving open appellate remedies that may require pre deposit. Forum replies advise cross verification with deductors, reversal and refund routes, and emphasise that bona fide credits should not lapse due to procedural or IT migration issues.