TaxTMI 
TaxTMI 
Guidelines for verifying the Transitional Credit in light of the order of the Hon'ble Supreme Court in the Union of India vs. Filco Trade Centre Pvt. Ltd
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....rvice Tax Network (GSTN) is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022. 2. Considering the judgments of the High Courts on the then prevailing peculiar circumstances, any aggrieved registered assessee is directed to file the relevant form or revise the already filed form irrespective of whether the taxpayer has filed writ petition before the High Court or whether the case of the taxpayer has been decided by Information Technology Grievance Redressal Committee (ITGRC). 3. GSTN has to ensure that there are no technical glitch during the said time. 4. The concerned officers are given 90 days thereafter to verify the veracity of the claim/transitional credit and pass appropriate orders thereon on merits after granting appropriate reasonable opportunity to the parties concerned. 5. Thereafter, the allowed Transitional credit is to be reflected in the Electronic Credit Ledger. 6. If required GST Council may also issue appropriate guidelines to the field formations in scrutinizing the claims. The Special Leave Petitions ....
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....dit: 5. Verification of the Transitional Credit 5.1 The jurisdictional tax officers can access the TRAN-1/TRAN-2 filed/revised by the application their back office systems (which is the CBIC-AIO portal for the central tax officers, the respective State portal for MODEL-1 States and BO portal for MODEL 2 States). Further, a self- certified downloaded copy of TRAN-1/TRAN-2 filed/revised by the applicant shall also be made available to the jurisdictional tax officer by the said applicant as mentioned in Para 4.5 of Circular No. 2223048 dated 15.09.2022. 5.2 The verification of the transitional credit shall be conducted by the jurisdictional tax officer who will pass an appropriate order regarding the veracity of the claim filed by the applicant, based on all the facts and the provisions of the law. In respect of TRAN-1/TRAN-2 filed/revised by the applicant under the administrative control of the central tax authorities, such verification and issuance of order shall be done by the jurisdictional officer of central tax, whereas in respect of TRAN-1/TRAN-2 filed/revised by the applicant under the administrative control of the state tax authorities, the same shall be done by the ....
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....referred in Para 6.1 below through his official email ID or physically. Similar action, as above, shall also be taken by the jurisdictional state tax officers in cases where the applicant is under the jurisdiction of state tax officer and where the transitional credit claimed has component of central tax also. 5.3.3. The jurisdictional tax officer shall, in parallel, continue the verification of the remaining portion of the transitional credit at his end. 5.3.4 The jurisdictional tax officer and the counterpart tax officer shall verify the transitional credit claimed under the CGST or the SGST head, as the case may be, by referring to the guidelines detailed in Annexure I to this circular for transitional credit pertaining to central tax and the guidelines detailed in Annexure II to this circular for transitional credit pertaining to State tax. While conducting the verification, the officer must also check whether any adjudication or appeal proceedings in TRAN-1/TRAN-2 related matter are pending/concluded against the applicant. In such cases, where any adjudication or appellate proceedings have been initiated against the applicant in respect of TRAN-1/TRAN-2, the officer shou....
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....comments of the counterpart officer on the submissions made by the applicant in so far as the said submission relates to the tax (central or State) being administered by such counterpart officer. 5.3.8 After considering the facts of the case, including verification report received from the counterpart officer, submissions made by the applicant and the comments, if any, of the counterpart officer on the same, the jurisdictional tax officer shall proceed to pass a reasoned order, preferably ' within a period of fifteen days from the date of personal hearing, specifying the amount of transitional credit allowed to be transferred to the electronic credit ledger of the applicant and upload a pdf copy of the said order, on the common portal for crediting the amount of allowed transitional credit to the electronic credit ledger of the applicant. In any case, such order shall be passed within a period of 90 days from 01:12.2022 i.e. upto 28.02.2023. 5.3.9 Where the amount credited to the electronic credit ledger pursuant to the originally filed TRAN-1/TRAN-2 exceeds the amount of credit admissible in terms of the revised TRAN-1/TRAN-2 filed by the applicant, such excess credit is....
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....-1/2/3 or ST-3) relating to the period ending with 30.06.2017, subject to conditions specified in section 140(1) of CGST Act, by the manufacturers/service providers. 2. Column 11 of table 6(a) 140(2) This table captures details of un-availed credit of capital goods in the pre-GST era. Capital Goods credit was allowed to be availed in two installments of 50% each. This table is meant to be used by the-taxpayers who have availed a portion of CENVAT credit on capital goods through ER or ST return and now intend to avail remaining credit in respect of capital goods which has not been availed through the ER or ST return. The said amount of credit should have been admissible as input tax credit under GST law as well as under existing law. 3. Table 7(a) Column (6) in Entry 7A in Table 7(a) 140(3), 140(4)(b), 140(6) and 140(7) This table pertains to credit claim by new taxpayers or taxpayers who were either not registered or were not part of CENVAT Credit chain earlier. Here, Credit can be claimed in TRAN-1 in respect of inputs held instock and inputs contained in semi-finished or finished goods held instock on the appointed day based on invoice/document evidenci....
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....but is indicative only based on provisions of law, the likely error and the inputs received from the field formations. Checks for Table 5(a): 3.1.1 Check 1: Verify that the credit has been taken against closing balance of CENVAT credit in ER-1/2/3 or ST-3. Credit can be taken only where the last return was filed and credit taken in Table 5(a) should not be more than closing balance of credit in ER-1/2/3 or ST-3 minus the education / secondary education cess /KKC/ SBC. 3.1.2 Check 2: Credit of taxes not covered in the definition of eligible duties in section 140 cannot be availed. Example: Krishi Kalyan Cess, Education Cess, clean energy cess etc. Credit of VAT and PLA balance is not allowed as transitional credit. 3.1.3 Check 3: Check that returns have been filed for last 6 months. An assessee filing TRAN-1 and taking credit in table 5(a) should have- a) Filed ER-1 or ER-2 regularly between Jan, 2017 and June, 2017 or b) Filed ER-3 for period ending March, 2017 and June, 2017 or c) Filed ST-3 for period ending March, 2017 and June, 2017. This check should be performed liberally where many units have merged into one registration or a single ....
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....for apportionment of credit relating to taxable goods/services and reversal of credit relating to exempted goods/services. Credit in table 5(a) would flow from the return in such cases. It should be checked that the return reflects credit after application of rule 6(3) of CENVAT Credit Rules. The reversal in terms of rule 6(3) was required to be done at the time of removal of finished goods. Therefore some credit in Table 7A can arise for such inputs which were in stock and which not attributed till the date of the transition to either exempted goods or non-exempted goods. To avail credit on such inputs, other conditions prescribed in cl (i) to (v) of section 140(3) are required to be satisfied. Where the stock shown is very high, verification using VAT return or any other collateral document, where stocks were declared, can be done. 5.2: Check 6: In cases where a new taxpayer has availed credit using Credit Transfer Document, check that CTD issued by the manufacturer exists and CTD has been issued in terms of rule 15(2) of CCR, 2017 read with notification no. 21/2017-CE(NT) dated 30.06.2017 (Capital Goods having value more than Rs. 25,000, goods to be identifiable by a distinct....
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....laimed through TRAN 1/TRAN-2 is not taken through return in FORM GSTR-3B. This can lead to double credit being taken. 10.2 Clarifications issued vide circular no. 33/07/2018-GST dated 23.02.2018 regarding disputed credit and blocked credit may be followed during the verification process of the transitional credit. *********** Annexure- II GUIDANCE NOTE FOR VERIFICATION OF SGST TRANSITIONAL CREDIT CLAIMED BY THE APPLICANT IN TRAN-1/TRAN-2 S. No. Table No. in TRAN-1 Provision in UPGST Act Indicative list of nature of Credit 1. table 5(c) 140(1), 140(4)(a) This table captures detail of the VAT credit carried forward in the return relating to the period ending with 30.06.2017, subject to conditions specified in section 140(1) of UPGST Act, by the manufacturers/service providers. 2. table 6(b) 140(2) This table captures details of un- availed credit of capital goods in the pre-GST era. Capital Goods credit was allowed to be availed in three installments in first return of succeeding three financial years. This table is meant to be used by the taxpayers who have availed a portion of VAT credit on capital goods through return and now intend ....
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....as filed and credit taken in Table 5(c) should not be more than closing balance of credit said return. Check 2: Credit of taxes not covered in the definition of eligible duties in section 140 cannot be availed. An amount paid as advance tax shall not be admissible as credit. Check 3: Check that returns have been filed for last 6 months. An assessee filing TRAN-1 and taking credit in table 5(c) should have- d) A dealer liable to file monthly return has filled form 24 regularly between Jan, 2017 and June, 2017 or e) A dealer liable to file monthly return has filled form 24 regularly between Jan, 2017 and June, 2017. Checks for Table 6(b): Check-4: Check that in table 6 only credit on capital goods not availed in any return is taken. Under Rule 24 of UPVAT Act, the ITC on capital goods could be availed in three successive annual installments and the first such installment was to be claimed in the tax return of first tax period of the succeeding financial year in which the capital goods were bought. Care should be taken for double claim of such ITC in VAT returns as well by transfer through TRAN. If no credit was availed earlier, credit of entire amount cannot be avai....
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....p; Table of TRAN- 1/TRAN-2 Findings of Appellate Authority $ Whether recovered (a) (b) (c) Notes: 1) Add additional rows if required 2) *Specify the serial number of the Table (as mentioned in Table at serial number 2 above) and the amount of tax the claim in respect of which has been adjudicated and the appeal has been decided. 3) $Specify whether amount has been recovered, either in cash or debit to credit ledger 4) Attach copies of the order of the appellate authority 4. Amount of credit claimed afresh/revised (as per TRAN-1/ TRAN-2 filed/ revised during the present window of two months) by the applicant, the amount admissible, the amount inadmissible, if any, along with the grounds/ reasons for non-admissibility thereof: Table Amount Claimed in newly filed/ revised TRAN- 1 / TRAN-2 Amount Admissible Amount inadmissible, if any Grounds of inadmissibility, along with the relevant provisions of law/ rules CGST SGST/ UTGST CGST CGST SGST/ UTGST (a) 5(a) ....