Tran 1 credit

[THYAGARAJAN KALYANASUNDARAM]

Dear Experts,

I have a doubt on the Transitional credit.

Suppose, if I have VAT credit for Rs.10 crore as on 30th June 2017 because raw materials procured from April to june 2017 for manufacturing of finished products. Later, the finished goods sold within the State by charging SGST and CGST in August 2017 and liable to pay Rs.12 crore under sgst Rs.6 crore and cgst Rs.6 crore.

When I have huge credit Rs.10 crore with the State Government, because of Government changed existing regime from vat to Gst. Now, my liability to be discharged under CGST 6 Crore though I'm having the credit under SGST. What is the remedy. Please let me know, I have transitional credit issue with the department.

Please cite some case laws to come out from this issue.

In nutshell, is there concept of interchange adjustment of vat tran credit under cgst.

Thanks in advance.

[Amit Agrawal]

There is no concept of using VAT credit under transition for paying CGST under GST. I am not sure how you managed to do that as GST portal should not have allowed you to the same.

Can you please elaborate what / how is it happened (i.e. how so you manage to use VAT TRANS-1 credit for paying CGST?) and what is the transitional credit dispute?

These are ex facie views of mine and the same should not be construed as professional advice / suggestion

[Shilpi Jain]

The transitional credit of VAT was transitioned by you into GST as SGST Credit or CGST And SGST?

Looks like further clarity on facts required.

AI Summary

Transitional VAT credit: cannot be used to discharge CGST liability under GST; factual clarification and portal review needed. Transitional VAT credit cannot be directly used to pay CGST unless it was validly transitioned and allocated as CGST credit; there is no automatic interchange allowing SGST transitional credit to extinguish CGST liability. Resolution depends on how credits were recorded in the transition form/portal and whether any misallocation or procedural error occurred that requires correction through transitional provisions and portal rectification.