Transitional Credit

[R N Desai]

Respected experts,

We had purchased certain inputs in the month of June, 2017.

The inputs were received and consumed in the same month.

The bills were raised by the supplier in the month of June, 2017 but were received and accounted in July, 2017.

We claimed Cenvat Credit in GST TRAN-1 which was filed within the stipulated time.

The Department is proposing to dis-allow the same on the ground that we should have claimed it in the monthly return of June, 2017. Transitional provisions are not attracted when input are received and consumed in the pre-GST regime.

Similar is the situation for services received and consumed in June, 2017.

Please give your valued views.

AI Summary

Transitional credit entitlement survives procedural invoice receipt delays, though show cause notices and litigation may follow.
Transitional entitlement to input tax credit exists where tax was paid and inputs were used pre GST; a delay in receipt or accounting of the supplier invoice after physical receipt and consumption is a procedural timing difference that does not automatically defeat the substantive right to claim credit, though the revenue may issue show cause notices and litigation may be necessary to obtain relief when documentary evidence supports the genuine transaction.