TRAN-1 - CREDIT CARRY FORWARD

[Vaishnavi Bubesh]

Dear Experts,

One vendor invoice related to Frieght CAF handling services for the month of June 2017 was raised with service tax on 03.07.2017. This input service is not shown in service tax return for Apr 17 to June 2017.

We have carry-forwarded this particular invoice in Table 7B of TRAN-1 return.

Now department has objected this referring - "section 140(5) of CGST Act 2017 allows only credit on the input/input services in transit. It is inferred from the reply that the services were already availed before appointed date and not in transit."

Please advise on way forward?

AI Summary

Transitional input tax credit: protect carry forward entitlement despite procedural TRAN 1 lapses, or reverse with interest as pragmatic option.
Dispute concerns entitlement to carry forward transitional input tax credit in Form GST TRAN-1 for a vendor invoice charged with service tax after the appointed day; the department invoked section 140(5) as limited to inputs or input services "in transit." Contributors rely on precedent (Adfert Technologies line) that procedural lapses in TRAN-1 filing do not extinguish substantive right to transitional credit and advise litigation for significant amounts or reversal with interest for small sums.