CREDIT TRANSFER DOCUMENT

[Mr. M. GOVINDARAJAN]

The GST is expected to come into force with effect from 01.07.2017. The transition provisions will help the registered person to carry over the CENVAT credit benefit to the new GST regime subject to some conditions. In the meantime the Government released the draft rule for the issue of Credit Transfer Document. It is proposed to insert provisions in CENVAT Credit Rules, 2004 for transfer of CENVAT credit paid on specified goods available with a trader on appointed date, i.e., the date from which the GST will be implemented.

Credit Transfer Document

This rule provides that a manufacturer who was registered under Central Excise Act, 1944 may issue the Credit Transfer Document (‘CTD’ for short). This document is to be issued to evidence payment of duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 paid on goods manufactured and cleared by him before the date on which the Central Goods and Services Tax, 2017 comes into effect. The CTD is to be under the cover of an invoice issued to a person who was not registered under the Central Excise Act but registered under GST regime.

Contents of CTD

The CTD shall be serially number and shall contain the-

• central Excise Registration number;

• address of the concerned Central Excise Division;

• name;

• address;

• GSTIN number of the person to whom it is issued;

• description;

• classification;

• invoice number with date of removal;

• mode of transport;

• vehicle registration number;

• rate of duty;

• quantity;

• value and duty of excise specified in the First Schedule to the Central Excise Tariff Act, paid thereon.

The CTD shall be issued within 30 days from the appointed date. A copy of the corresponding invoices shall be enclosed with CTD.

Conditions

The CTD issued is subject to the following conditions-

•The value of such goods in higher than ₹ 25000/- per piece, bears the brand name of the manufacturer or the principal manufacturer and are identifiable as a distinct number such as chassis/engine no. of a car.

• Verifiable records of clearance and duty payment relatable to each piece of such goods is maintained by the manufacturer and are made available for verification on demand by a Central Excise Officer;

• The manufacturer is to satisfy that the dealer is in possession of such manufactured goods in the form in which it was cleared by him;

• Copies of all invoices relating to buying and selling from manufacturer to the dealer, through intermediate dealers, is maintained by the dealer availing credit using CTDs.

• It shall not be issued in favor of a dealer for the same goods before the appointed date.

• A dealer availing credit using this document shall not be eligible to avail credit under Rule 1(4) of Transition Rules under CGST Act on identical goods manufactured by the same manufacturer available in the stock of the dealer;

• The dealer at the time of making supply of such goods, shall mention the corresponding CTD number in the invoice issued by him under section 31 of the CGST Act, 2017.

Recovery of credit

Where a manufacturer issues a CTD such that credit of central tax is availed twice on the same goods, he shall be jointly and severally responsible for excess credit availed by the dealer and provisions of recovery of credit, interest and penalty under the CENVAT Credit Rules, 2004 shall apply on such manufacturer.

Submission of details

The manufacturer as well as the dealer is to submit details in Form TRANS 3 on common portal within sixty days of the appointed date. The manufacturer is to give the details in Table 1 of the TRANS 3 and the dealer in Table 2 of the TRANS 3.

In Table 1 the following details to be furnished by the manufacturer-

• Sl. No.;

• GSTIN of the dealer whom CTD is issued;

• Total number of CTDs issued;

• Number of invoices against which CTDs have been issued;

• Total quantity for which CTD issues;

• Total value of Goods for which CTDs have been issued;

• Central Excise Duty paid on such goods.

In Table 2 the following details to be furnished by the dealer-

• Sl. No.;

• GSTIN of the dealer whom CTD is issued;

• Total number of CTDs received;

• Number of invoices against which CTDs have been issued;

• Total quantity for which CTD issues;

• Total value of Goods for which CTDs have been issued;

• Central Excise Duty paid on such goods.

Maintaining of records

The manufacturer as well as the dealer is required to maintain record for this purpose. The manufacturer shall maintain record in the form TRANS – 3A and the dealer shall maintain record in the form TRANS -3B. Such record shall be made available to the Central Excise Officer for verification on demand.

The manufacturer shall in Form TRANS – 3A maintain the documents as detailed below-

• Sl. No.;

• CTD No.;

• Invoices Number against which CTD has been issued;

• Invoice date;

• Months in which these clearances were made against the invoices;

• GSTIN numbers of all the intermediate buyers and sellers through whom the goods have passed;

• Value of goods;

• Central Excise duty paid.

Copy of invoices of the intermediate dealers through whom goods have passed shall be maintained in records by the dealer availing credit on CTD.

The dealer shall in Form TRANS – 3B maintain the documents as detailed below-

• Sl. No.;

• CTD No.;

• Invoices number against which CTD has been issued;

• Months in which these clearances were made against the invoice;

• GSTIN numbers of all the intermediate buyers and sellers through whom the goods have passed;

• Value of goods;

• Central Excise duty paid on them.

CTD as a document

It is proposed to amend Rule 9 of CENVAT Credit Rules, 2004 to include CTD in the list of documents using which credit can be availed subject to the condition that such CTD is issued after the appointed date and within 30 days of the appointed date.