Who can avail the opportunity of claiming transitional credits via Form TRAN-1/TRAN-2?

[Kapil Mahani]

The Hon’ble Supreme Court in the case of UNION OF INDIA & ANR. VERSUS FILCO TRADE CENTRE PVT. LTD. & ANR. - 2022 (7) TMI 1232 - SC ORDER directed the Central Government to open the GST portal for filing/ revision of Tran-1 and Tran-2 forms for a period of two months i.e., w.e.f. September 01, 2,022 to October 31, 2022. Such benefit of claiming transitional credit was made available to ‘any aggrieved registered assessee’.

Pursuant to the above, revenue authorities moved a miscellaneous application seeking an extension of the deadline for opening the GST portal. The Hon’ble Supreme Court vide order dated September 02, 2022, has granted an extension of four weeks.

In line with the said directions, CBIC vide Circular No.180/12/2022-GST dated September 09, 2022, has now issued guidelines for filing/revising TRAN-1/TRAN-2 during the period October 01, 2022, to November 30, 2022.

Guidelines are summarized hereunder for ease of reference: -

1. The applicant may file the declaration in FORM GST TRAN-1/TRAN-2 or revise earlier filed TRAN-1/TRAN-2 duly signed or verified through an electronic verification code on the common portal.
2. Additional Declaration (Annexure-A) is required to be filed.
3. In case of credit availed on the basis of Credit Transfer Document (CTD), TRANS-3 needs to be uploaded.
4. No transitional credit to be filed in case of C/F/H/I Forms received after 27 December 2017.
5. In case of TRAN-2, a consolidated claim is required to be filed, rather than filing for the individual tax period.
6. Copy of TRAN-1/TRAN-2 along with Annexure-A or TRANS-3 as applicable needs to be submitted to the jurisdictional GST officer within 7 days, along with necessary documents for verification by the officer.
7. The current facility of filing/revising TRAN-1/TRAN-2 is not available in case where it was successfully submitted, however same has been rejected/denied by the department. Adjudication/Appellate procedure is the Appropriate remedy in such cases.
8. Once the applicant files TRAN-1/TRAN-2 or revises the said forms filed earlier on the common portal, no further opportunity to again file or revise TRAN-1/TRAN-2, either during this period or subsequently, will be available to him.
9. The transitional credit will only be allowed post verification of claim by the department.

Our comments

Post the Hon’ble Supreme Court decision, CBIC has issued much-awaited guidelines clarifying the procedure and declaration to be made at the time for the filing of TRAN-1/TRAN-2 forms.

Basis the above, it is amply clear that the aforesaid facility can be availed by the following categories of taxpayers: -

1. Unable to file Tran form and having evidence of an attempt to file Tran-1 Form.
2. Unable to file Tran-1 forms and do not have any proof of an attempt to file Tran-1 Form
3. Have filed the Tran-1 form but the credit has not been shown in complete aspects
4. Have filed the Tran-1 form but the credit has been shown in incorrect column
5. Unable to file the Tran-1 form or revise/rectify the Tran-1 Form filed by them earlier and have not filed writ against the same.
6. Filed the Tran-1 form within the prescribed time period, credit has been shown in incorrect column and show cause notice has not been issued against the same.

 With regard to the cases where the credit availed by the registered person on the basis of FORM GST TRAN-1/TRAN-2 filed earlier, has either wholly or partly been alleged to be wrong i.e Disputed by the proper officer by way of issuance of show cause notice or  order has been issued by the proper officer against such show cause notice, and the appeal is pending/filed before the appellate authorities, then in such cases, taxpayers cannot revise the earlier filed TRAN-1/TRAN-2 form basis the para 4.7 of the circular no. 180/12/2022-GST dated September 09, 2022.

Now, the moot question is with regard to the show cause notice stage wherein the credit availed by the taxpayers in TRAN-1/TRAN-2 form is pending for finalization before the proper officer i.e pending for adjudication, then in such cases, whether the facility for revision is available for the taxpayers?

Para 4.7 of the Circular No. 180/12/2022-GST dated September 09, 2022 provides that facility for revision of Tran form is not available wherein the credit has been wholly or partly rejected by the proper officer and appeal is pending before the appellate authorities. Where the adjudication/appeal proceeding in such cases is pending, appropriate course would be to pursue the said adjudication/appeal.

Adjudication is being used in the parlance when the hearing against the issuance of Show cause notice is pending. Here the adjudication in the captioned circular means whether adjudication to show cause notice or hearing of Commissioner (Appeals) is pending.

It is important to note that the said facility is the last opportunity to avail of transitional credit. Taxpayers should be very cautious while filing and submitting the said form.