Entitlement of Transitional Credit

[SUBRATA RAY]

RTP was dealing with MRP goods such as vetenary drugs during VAT regime and suffered tax on first point of sale in the State and subsequent sales were not subjected to tax in the state under erstwhile law but liable to tax under gst whether the RTP is eligible to take credit of input tax suffered in his electronic credit ledger as per S.140(3) by filing TRANS 2

[KASTURI SETHI]

Veterinary drugs were leviable to Central Excise duty under Chapter Heading Nos.30 & 38 of Central Excise Tariff Act. Correct classification depends upon the specific veterinary drugs manufactured by you. So your products qualify the criteria of , "Eligible Duties" In the absence of duty paying documents Govt. allowed deemed credit (60%/40%) in respect of stock of inputs held on 1.7.17. Such deemed credit was subject to the condition, "within such time and such manner as may be prescribed "inserted retrospectively w.e.f. 1.7.17 As you are well aware that declaration was to be filed in TRANS-2 within stipulated period. After filing such declaration, the stock was to be verified physically on the basis of declaration. Now at this stage stock cannot be verified physically by the department.

In my view, as per the directions of Hon'ble Supreme Court vide Order dated 22.7.22 in the case of UOI Vs.Filco Trade Centre (P) Ltd. & Others - 2022 (7) TMI 1232 - SC ORDER, you can file TRANS-2 on the basis of books of accounts, it being a statutory record. Common Portal system has been opened for ALL for two months.

The proviso inserted retrospectively should not be a bottleneck, especially, in view of the directions issued to UOI by the Apex Court. As per legal definition of the word 'aggrieved' in my view you are eligible to file TRANS-2. Emphasis is laid on 'ANY' Aggrieved registered assessee.

AI Summary

Transitional credit eligibility: registered assessees may file TRANS-2 based on statutory books after judicial directions. Transitional credit is available where pre-GST duties on opening stock qualify as eligible duties and deemed credit was allowed subject to a prescribed declaration and verification. Where physical verification cannot now occur, judicial directions permit filing the prescribed declaration on the basis of statutory books of accounts; portal access has been opened temporarily. The retrospective proviso should not bar claims supported by records, and any aggrieved registered assessee may pursue the declaration route.