CVD and Trasn 1 credit

[Rahul Bagaria]

Hi , My company could not transfer the CVD credit benefit to the existing dealers in 2017. Now for the same dealers we also have debit balance . Is it possible to adjust the same by means of book accounting entry

Rahul Bagaria

[Kashish Gupta]

Hi Rahul

The due date to file Form GST- TRAN-1 has expired on 27.12.2017. However, in cases of technical glitches, the date stood extended to 31.03.2020 vide NN 02/2020-CT.

Also the credit of CVD lying in your books and lying in unsold stock as on 30.06.2017 with dealers was allowed as credit subject to availability of prescribed documents. Therefore, merely a book adjustment won't do anything until and unless it enters into the electronic credit ledger.

Therefore, conclusion of this advisory depends on the facts which needs to be studied. Kindly share the details.

[Spudarjunan S]

You may also consider the recent decision of Hon'ble Delhi HC in the case of M/s Brand Equity = 2020 (5) TMI 171 - DELHI HIGH COURT where it had pronounced that Transitional credit can be claimed till 30.06.2020 i.e. General Limitation of 3 years would applied and not 90 days as provided in GST Law.

AI Summary

Company Faces CVD Credit Adjustment Issues; Transitional Credit Claims Extended to June 2020 Per Delhi HC Decision A company inquired about adjusting CVD credit benefits that were not transferred to dealers in 2017, now facing a debit balance, through book accounting entries. One response highlighted that the deadline for filing Form GST TRAN-1 was extended to March 31, 2020, due to technical issues, and emphasized that credits must be entered into the electronic credit ledger, not just adjusted in books. Another response referenced a Delhi High Court decision allowing transitional credit claims until June 30, 2020, suggesting a three-year limitation period instead of the 90 days stipulated in GST law.