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Dr. Sanjiv Agarwal By: Dr. Sanjiv Agarwal
November 22, 2022
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When GST was introduced in country from 01.07.2017, it was stipulated that the carried over input tax credit (Cenvat Credit) in pre-GST era shall be allowed to be used in the post GST era as transitional credit under section 142 of CGST Act, 2017. However, this could not become a reality in most of the cases because of the technical glitches in the GST network (GSTN). While the revenue authorities were adamant on strict compliance disallowing the credit, for no fault of assessee, it resulted into rampant litigation across the country which has now been settled by Supreme Court recently. Now a two months window has been offered to the aggrieved taxpayers and it is one time golden opportunity to be availed for the credit of transitional credit even after 5 years of GST in the country.  This piece discusses the salient features of the scheme to avail transitional credit now.

Supreme Court Directive

Hon’ble Supreme Court of India has ruled that the taxpayers shall be given a one-time opportunity to claim transitional Input Tax Credit (ITC). To make this happen, the Court directed the department to re-open the facility to file TRAN 1/ 2 forms.

Supreme Court in UNION OF INDIA & ANR. VERSUS FILCO TRADE CENTRE PVT. LTD. & ANR. - 2022 (7) TMI 1232 - SC ORDER read with UNION OF INDIA VERSUS FILCO TRADE CENTRE PVT. LTD. - 2022 (9) TMI 514 - SC ORDER has directed CBIC to open GST portal for two months for claiming transitional credit under GST law for taxpayers. Availing transitional credit via TRAN-1 and TRAN-2 form shall open for two months.

Union of India later approached the Supreme Court for thirty days extension for opening special window for transitional credit claims under GST. This extension would ensure that GSTN gets sufficient time to make changes in the common portal to facilitate filing. The miscellaneous application filed by Union of India had sought the extended time between 01.10.2022 and 31.12.2022 instead of September, 2022 to October, 2022. Moreover, the portal avoids IT changes between 07th to 24th of every month in view of the peak filing period.

The Supreme Court bench accepted the requests of Government vide order dated 02.09.2022 and has granted extension of 30 days to Ministry of Finance for opening of the GST common portal. It has directed the GSTN to open the portal from 1st October, 2022 to 31st December, 2022 to give full effect to its order dated 22.07.2022. The portal shall therefore, be open for 92 days from 1st October, 2022.

Following the Apex Court’s directive, the Goods and Services Tax (GST) portal re-opened the facility to file or revise earlier filed TRAN 1/ 2. The taxpayers can file these forms between 1st October, 2022 till 30th November, 2022, according to the Apex court instructions. The taxpayers shall note that the process flow for TRAN filing differs from the filing process in FY 2017-18, as the GST portal enhanced the filing process and user interface. So, to make things clear, the portal released an advisory on the re-opening of TRAN 1/ 2 to claim transitional ITC.

Any aggrieved registered assessee can 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).

GSTN has to ensure that there are no technical glitch during the said time. 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. Thereafter, allowed Transitional credit is to be reflected in the Electronic Credit Ledger.

GSTN Advisory on TRAN Forms

In terms of Apex Court directive, GSTN has issued a detailed advisory for filing revised from or claim transitional credit. Accordingly,

  • The transitional credit availed by the taxpayer in TRAN 1 or 2 forms shall be verified by the jurisdictional tax officer before the credit entry is made in the respective ledgers.
  • TRAN-2 form shall be made available only if the taxpayer has filed TRAN-1 and have made declaration in table 7 of TRAN-1.
  • Those registered persons, who had successfully filed TRAN 1/ 2 earlier, and who do not require to make any revision in the same, are not required to file/ revise TRAN 1/ 2 again during this period from 01.10.2022 to 30.11.2022.
  • The option of filing or revising TRAN 1/ 2 on the common portal during the period from 01.10.2022 to 30.11.2022 is a one-time opportunity for the applicant to either file the said forms, if not filed earlier, or to revise the forms filed earlier.
  • Input Tax Credit shall reflect in the Credit ledger of the taxpayer post verification by the jurisdictional tax-officer.

Important points to keep in mind while freshly filing or revising already filed TRAN forms:

  • The TRAN forms are enabled, and the default filing status of forms is set as “Not Filed”. 
  • This status means that the TRAN forms are not filed between 1st October, 2022 to 30th   November, 2022.
  • Those who had successfully filed TRAN 1/ 2 earlier and do not wish to make any revisions are not required to file/ revise TRAN forms again.
  • This option of filing or revising TRAN forms is a one-time opportunity.
  • Hence, you should take utmost care and precaution while filing or revising TRAN 1/ 2 and thoroughly check the details before filing a claim on the common portal. 
  • You are advised to save the added records on each table before navigating to other tables.
  • Also, you should save the details periodically, download the data and cross-verify downloaded data with the added records/uploads before submitting the forms.
  • Please note that you can add, modify/edit, or delete any record in any of the tables before clicking on the ‘Submit’ button.
  • However, once the ‘Submit’ button is clicked, the entries will be locked, and you can not take further action.
  • Suppose you have already filed the TRAN forms and planning to revise them. In that case, you should file the complete form with all the required details but not the difference of values between the originally claimed ITC and the ITC being claimed now.
  • You can use the preview functionality to download the TRAN forms in excel and ensure the correctness of the details filled before submission.
  • Once you’ve submitted the form, you must file the TRAN forms using either ‘File with DSC’ with Digital Signature Certificate (DSC) or ‘File with EVC’ options with an EVC. Otherwise, the submitted forms would be considered as not filed.
  • Also, after completion of filing TRAN forms, make sure to upload the supporting documents in the separate facility under the ‘Upload Documents’ tab. The taxpayer can find this tab by navigating Services > Returns > Transition Forms > Upload documents.
  • The transitional ITC shall reflect in the credit ledger only post verification of the jurisdictional tax officer.
  • The portal is working on providing the option to download earlier filed TRAN-1 forms to ease the process further.

In would be desirable for avail this one-time opportunity to file or revise the returns and claim the transitional input credit of pre-GST regime now. The time limit of 30th November shall be borne in mind.


By: Dr. Sanjiv Agarwal - November 22, 2022



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