TRANSITIONAL CREDIT as per proviso to Section 140(3)

[GAURAV SHARMA]

Namaskar to all,

M/s.A has two business in same PAN. For one segment he had VAT Registration (Trader in ready-made garments) & for the other he had Service Tax (ST) Registration (Supplier of Service- Business Auxillary). M/s. A claimed Trans Credit of Excise Duty as CGST as per proviso to section 140(3) on stock as on 30.06.2017 after filing TRANS-1 & TRANS-2.

Proviso to Section 140(3) states: Provided that where a registered person, other than amanufacturer or a supplier of services, is not in possession of an invoice or any other documents evidencing payment of duty in respect of inputs, then, such registered person shall, subject to such conditions, limitations and safeguards as may be prescribed, including that the said taxable person shall pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to take credit at such rate and in such manner as may be prescribed.

Now the department is contending that to claim the RTP must be other than a manufacturer or a supplier of service and in this case although M/s. A was not a manufacturer but was a supplier of service hence cannot claim credit.

Requesting all my learned friends to share their knowledge.

Thanks in advance

AI Summary

Business Entity's Transitional Credit Claim Under Section 140(3) Contested; Eligibility as Trader Debated by Experts A business entity, M/s A, with VAT registration for trading in garments and service tax registration for business auxiliary services, claimed transitional credit of excise duty as CGST under Section 140(3) of the CGST Act. The tax department contested this claim, arguing that the entity, being a service provider, does not qualify under the proviso to Section 140(3), which applies to those not registered under existing laws. Respondents in the discussion forum suggest that M/s A might still be eligible for the credit as a trader, recommending expert consultation for a comprehensive defense strategy.