TMI BlogGuidelines for verifying the Transitional Credit in light of the order of the honourable Supreme Court in the Union of India v. Filco Trade Centre Pvt. Ltd., SLP(C) Nos. 32709-32710/2018, order dated July 22, 2022 and September 2, 2022X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned forms for availing transitional credit through TRAN-1 and TRAN-2 for two months, i. e., with effect from September 1, 2022 to October 31, 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 glitches 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 are disposed of accordingly. Pending applications, if any, also stand disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Transitional Credit : 5. Verification of the transitional credit 5.1 The jurisdictional tax officers can access the TRAN-1/TRAN-2 filed/revised by the applicant on 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 this Commissioner Circular No. 129/2022-GST, dated September 16, 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 Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is needed from him, on a weekly basis, along with an intimation of the same to the nodal officer of state tax as well as central tax referred in Para 6.1 below through his official email 10 or physically. Similar action, as above, shall also be taken by the jurisdictional central tax officers in cases where the applicant is under the jurisdiction of central tax officer and where the transitional credit claimed has component of State 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 shall also receive the request for verification of transitional credit claimed under the SGST Act, from the counterpart central jurisdictional officers. The jurisdictional officer shall verify the transitional credit claimed under the SGST. head pertaining to taxable persons originating in his office as well as received from the counterpart central jurisdictional officers, by referring to the guidelines detailed in annexure I of this circular. While conducting the verification, the officer must also check whether any adjudication or appeal proceedings in Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax officer shall decide upon the admissibility of the credit claimed by the applicant. In case the jurisdictional tax officer finds that the transitional credit claimed by the applicant is partly or wholly inadmissible as per the provisions of the Act and the rules thereof, then a notice shall be issued by the jurisdictional tax officer to the applicant preferably within a period of seven days from the receipt of report from the counterpart officer, seeking explanation of the applicant as to why the said credit claimed by him should not be denied wholly/partly, as the case may be. The applicant shall also be provided an opportunity of personal hearing by the jurisdictional tax officer in such cases. If required, the jurisdictional tax officer may seek 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of these instructions may be informed to this office. Principal Commissioner of State Tax, Assam. Annexure-I Guidance note for verification of Assam GST transitional credit claimed by the applicant in TRAN-1/TRAN-2 1. Description of entries in TRAN-1 table (i) In the FORM GST TRAN-I, there are details of statutory forms received for which credit is being carried forward during the period from 1st April 2015 to 30th June 2017 in Table 5(b) and Table 5(c) in the return filed under existing laws. (ii) In the FORM GST TRAN-I, all the entries relating to SGST credit which is posted in the electronic credit ledger are briefly described below. It is advised that the full text of law be referred for better understanding of the issue. Sl. No. Table No. in TRAN-1 Provision in CGST Act Indicative list of nature of Credit 1. Table 5(c) 140(1) and 140(4)(a) This table captures detail of the Cenvat credit carried forward in the return (ER-1/2/3 or ST-3) relating to the period ending with June 30, 2017, subject to cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the existing law to the extent of supplies made after 1st July, 2017 as he would be liable to pay SGST in respect of such supplies. (VAT credit cannot be taken as service tax credit and vice versa) 2. Checks for verification of entries in TRAN-1 table : As a matter of assistance, following checks are suggested in relation to the entries provided in various tables of TRAN-1. The list of checks is not exhaustive but is indicative only based on provisions of law, the likely error and the inputs received from the field formations. 3. Checks for table 5(c) : 3.1 Check 1 : a. Transitional credit should be less than amount shown in Sl. 13 (t) of Part-I in Form-14 (VAT Return) of June-2017. b. Verify whether the registered person has filed returns for the previous 6 months. c. Whether the input tax credit claimed as transitional credit is an admissible input-tax credit under the GST Act. d. Whether the amount claimed under TRAN-I is already refunded under the VAT Act out of Sl. 13(t) of Part-I of Form 14 (VAT Return) during any re-assessment proceedings. e. Check for the CST Assessment order for the tax periods April- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the said taxable person has passed on the benefit of such credit by reducing the prices if such claimant is not a manufacturer or supplier of services. if the said registered person has claimed that he is not in possession of invoices or documents evidencing the payment of tax on such inputs. 5.1.3 Also check whether such invoices are issued on or after July 1, 2017 and whether such inputs are used for making taxable supplies under the GST Act and the claimant is eligible for input-tax credit under the GST Act. 5.1.4. Check whether the inputs are received after July 1, 2017 but invoiced prior to July 1, 2017 and whether such input-tax credit has been claimed on such invoices during the earlier period and whether any revised return has been filed to claim this input-tax credit. Also check whether the claimant has filed a statement in respect of this input-tax credit. 5.1.5. COT to GST : Check whether the person was under composition scheme under the VAT Law and is under regular scheme under the CST Law and has stock of inputs or semi-finished or finished goods as on July 1, 2017 and he is eligible for input tax credit under the GST Law and has the tax paid doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit ledger. (6) Attach copies of the relevant notice/adjudication order. 3. (a) Whether appeal has been filed against the adjudication order, if any, specified in serial number 2 above ; if Yes , provide appeal number and date of filing appeal. (b) If appeal has been disposed of, then provide order number and date : (c) Details relating to appellate order : *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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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