Transitional Credit

[saket s]

The Company opts for new rates under GST for its ongoing projects and there is transitional credit available to the Company (“Tx” is negative) as per notification 3/2019 CTR. What is the treatment of the transitional credit available?

Can the credit be utilized for subsequent GST payments?

Can only new credit be availed to the extent of transitional credit?

Thanks

Saket

[Shilpi Jain]

The amount of Tx can be availed by way of credit contained in the procurement made from 1st Apr '19. However, its utilisation would be difficult if the assessee does not have any liability other than 5%. If other liabilities are there which do not have credit utilisation restriction, the Tx can be used for that liability.

AI Summary

Guidance on Using Transitional Credit for GST Payments Under Notification 3/2019 CTR Clarified: Restrictions and Liabilities Explained A company transitioning to new GST rates for ongoing projects has available transitional credit as per notification 3/2019 CTR. The query seeks clarification on utilizing this credit for subsequent GST payments and whether only new credit can be availed to the extent of transitional credit. The response indicates that the transitional credit can be availed from procurements made after April 1, 2019. However, its utilization is challenging if the company has no liabilities other than those restricted to 5%. If there are other liabilities without such restrictions, the transitional credit can be used for those.