TMI BlogGuidance note on CGST transitional creditX X X X Extracts X X X X X X X X Extracts X X X X ..... Secondly, same CENVAT credit cannot be availed as transitional credit twice. This can happen in situations such as, availing CENVAT credit as transitional credit through TRAN 1 and also through return in FORM GSTR 3B or availing same credit twice through two different tables of Form TRAN I. 1.3 One more factor which would be verified is the growth of CENVAT credit in the period September, 2016 to June, 2017. During this period steep increase in credit claim has been noticed for some taxpayers. Accordingly, it has been decided to collect information from this small category of taxpayers, and verify the correctness of credit availed by them by checking the tax payment by their suppliers. 2. Description of Entries in TRAN-I Table In the Form TRAN 1 there are only six entries which decide all the CGST credit which is posted in the electronic credit ledger. These entries are briefly described below. S. No. Table No. in TRAN-I Provision in CGST Act Indicative list of nature of Credit 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (8) in Table 7(b) 140(5), 140(7) This table captures transitional credit taken on such inputs or input services which were received after 1st of July, 2017 but taxes on which were paid under the existing law (Goods/ Services in Transit). It does not apply to capital goods. This table also captures credit distributed by the Input Service Distributor. 5. Column 9 in Table 8 140(8) This table pertains to Centrally Registered unit, the Cenvat credit carried forward in their last return is captured in table 5(a) and a part or full of such credit can be distributed through table 8. The credit distributed through column 9 gets credited in the electronic credit ledger of the receivers and a corresponding debit entry in made in the ledger of the Centrally registered unit. 6. Column (7) in Table 11 Section 142 (11)(c) read with Rule 118 of CGST Rules Transition of credit in respect of supplies which attracted both VAT and Service Tax in pre- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot availed in any return is to be taken. If second instalment of any capital goods credit is taken through return in table 5(a) and again the details are filled in table 6, it would lead to double credit getting taken. For example, the second instalment of capital goods credit where first instalment credit was availed in 2016-17 and second instalment can be availed in the financial year 2017-18, provided the second instalment was not availed in any of the returns filed in the first quarter of 2017-18 under Central Excise or Service Tax. If no credit was availed earlier, credit of entire amount cannot be availed through this Table. 5.2 Check 5: For some of the invoices involving large credit, if the invoice date is very old, confirmation from assessee would be taken that the capital goods are in existence in the place of business. 6. Checks for Table 7(a), Entry 7A: 6.1 Check 6: In cases where the credit is being shown by an assessee who was registered in Central Excise or Service on account of inputs relating to exempted goods, the check would be whether the assessee has followed the provisions of rule 6 in the period prior to GST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r etc.). Eg. : Dealers of new car. 7. Checks for Table 7(a), Entry 7B: 7.1 Check 8: It would be checked that the Credit on stock declared on which credit can be claimed in terms of rule 117(4) of the CGST Rules, 2017 are reasonable. Where the stock declared in very high, stock declared in VAT return or any other collateral document, where stocks were declared, would be cross-checked. Credit of this stock would be available on sale being made and TRAN 2 return being filed. It is reiterated that electronic credit ledger would get populated through TRAN-2 and not through TRAN- 1. 7.2 Check 9: It would be checked that assessee has not declared this stock in any other table or has not availed this credit from any other table, say table 5(a). Where the person availing credit through TRAN 2, for which stock is declared in this table, is a trader, no credit can exist in any other table which pertains to credit to taxpayers who were registered earlier [e.g. Table 8. Checks for Table 7(b): 8.1 Check 10: It would be checked that the duty paying document exist and the confirmation would be taken from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be shortly provided. The taxpayers are informed that such a return would be required to be filed in the following format on a date to be notified. Name of the registered person. Registration Number in Central Excise or Service Tax who has claimed TRAN Credit. Period of return: 01/10/16 to 30/06/17 Name of the supplier under Central Excise or Service Tax Registration number of the supplier under Central Excise or Service Tax No. of invoices on which credit was taken Central Excise duty or Service tax shown as having been paid in their invoices The taxpayers whose credit growth would be verified as above are advised to confirm from the suppliers of goods and services on whose invoice credit has been taken, that the said supplier had declared the goods and services in their respective returns and had paid tax thereon. 12. Jurisdiction: CGST officer of the Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X
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