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

AI Summary

Transitional credit under GST: usable against eligible post-rate-change procurements, but may be restricted if only reduced-rate liabilities exist.
Transitional credit under GST can be availed only for procurements made after the rate change; claimants must allocate Tx to eligible post-change acquisitions. Utilisation is limited where the taxpayer's sole liability is a reduced-rate output tax subject to credit-use restrictions, but Tx may be applied to other liabilities that lack such restrictions.