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

Transitional credit: deadline extensions permit claiming CVD credit only if entered into electronic credit ledger with required documents. Transitional CVD credit requires entry into the electronic credit ledger and prescribed documentary support for unsold dealer stock; mere book adjustments are insufficient. Claiming such credit depended on filing Form GST-TRAN-1 within the extended filing window or other relief that preserved entitlement, and recent authority indicates such claims may be governed by the general limitation period rather than a shorter GST-specific timeframe.