Transitional Credit

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

One of my client's instead of transfer the credit through by filing TRAN-1 from VAT to GST but taken wrongly in GSTR-3B. How do I rectify this mistake and get the proper credit?

If any case laws supporting this, please share this very urgently needed.

I appreciate any help you can provide.

[Ganeshan Kalyani]

In my view, there is no facility as of now to rectify such instance. If your claim of transitional credit is correct then you can still justify the authority that medium of carry forwarding the claim in incorrect but the claim it self is not. Was there any system error ?

[THYAGARAJAN KALYANASUNDARAM]

Dear Sir,

No sir. He was not attempted to file TRAN-1. Instead of filing Tran-1, he directly has taken this credit into GSTR-3B.

[Ganeshan Kalyani]

Sir, you will will have to justify your claim at the time of verification from the department.

[Ramkumar chelliah]

I would like to state that once a duty is paid the same can be allowed as Input Tax Credit. The Department cannot disallow the Input Tax Credit availed because the duty paid cannot be disputed and the use of the inputs in the supply of final product cannot be disputed. Hence the Input Tax Credit cannot be denied for the simple reason of not included in the GSTR-3B.

[Ganeshan Kalyani]

Sri Ramkumar Sir, I agree with you. However, the department may raise an objection stating that the transitional credit should have been claimed according to the transition provision. There were number of queries in 2017, 2018 and also in 2019 on the claim of transitional credit.

[KASTURI SETHI]

I support the views of Sh.Ganeshan Kalyani Ji. Such direct carry forward credit is not litigation-free. SCN is most likely to be issued by the department.

[THYAGARAJAN KALYANASUNDARAM]

Dear Sir,

My client was audited by the GST Central Officer and issued defects notes to the client. The officer insisting the client to reverse and pay the wrong credit availed through GSTR-3B along with Interest, else they will issue SCN. I told the client to take the SCN, based on the cause of action; we will invoke the WRIT Jurisdiction. Is this my advice is correct?

Please advise me any other way out.

Thank you so much for your attention and participation.

AI Summary

Client Faces GST Transition Error: Filed Credit in GSTR-3B Instead of TRAN-1; Experts Discuss Potential Legal Remedies A client mistakenly claimed transitional credit by incorrectly filing it in GSTR-3B instead of using TRAN-1 from VAT to GST. Experts in the forum discuss the lack of a current facility to rectify this error and suggest justifying the claim during departmental verification. One expert argues that Input Tax Credit should not be denied if the duty paid is undisputed, while others warn that the department may object due to incorrect transition procedures, potentially leading to a Show Cause Notice (SCN). The client, audited by GST authorities, was advised to prepare for potential litigation by invoking WRIT Jurisdiction.