GST Transitional Provisions, GST Transition Rules: Every registered person who is eligible to take credit of eligible duties and taxes paid under existing laws in respect of input or input services or capital goods in his/her Electronic Credit Ledger, needs to file a declaration in Form GST TRAN – 1 within 90 days of the appointed day (1st July 2017) or as extended by the Commissioner after recommendation of GST Council.
Check out Rules for Transition Provisions under GST Regime. In this article you may find complete details for GST Transitional Rules like – Declaration of stock held by a principal, Details of goods sent on approval basis, Recovery of credit wrongly availed etc…. Now scroll down below n check more details for “GST Valuation Rules, Determination of Value of Supply under GST”
GST Transition for Registration
For existing taxpayers migrating to GST there are provision in the GST law covering various business scenarios that any business is likely to face during the transition period;
- Every person registered under any of the earlier laws shall be issued a certificate of registration on a provisional basis.
- Such Provisional certificate of registration shall be valid for a period of six months (or extended period on notification) from the date of its issue. Final registration certificate will be issued on furnishing requisite information and documents.
- The certificate of registration issued to a person may be cancelled if such person fails to furnish, within the time specified.
- If person wants to take use the option for composition scheme, he may proceed with requisite information and application for such option.
- The certificate of registration issued to a person shall be deemed to have not been issued if the said registration is cancelled in pursuance of an application filed by such person that he was not liable to registration.
GST Transitional Provisions for Services
- Transitional provisions relating to job work are contained in Section 141 of the CGST Act, 2017. They are simultaneously applicable to inputs, semi-finished goods and finished goods.
- These provisions relate to inputs, semi-finished goods and finished goods cleared to a job worker for further processing, testing, repair or any other purpose before the appointed day as per the provisions of earlier law and not received back until the appointed day.
- Section 141 provides that if such inputs, semi-finished goods and finished goods are returned to the said factory after completion of job work after the appointed day, no tax shall be payable. The condition is that the goods should be received within 6 months from the appointed day. However, the competent authority may extend the period on sufficient cause being shown for a further period of 2 months.
- The condition is that the manufacturer and job worker should declare (in the prescribed manner) the details of inputs, semi-finished goods and finished goods held in stock by the job worker on behalf of the manufacturer on the appointed day.
- Similar provisions are there for SGST and IGST.
- In case of semi-finished goods and finished goods, the manufacturer may transfer the goods to the premises of any registered taxable person for the purpose of supplying them from thereat by payment of tax in India or without payment of tax for export.
GST Transition Formats
|Form GST TRAN – 1||Transitional ITC / Stock Statement|
|Form GST TRAN – 2|
GST Transition Rules (Updated)
Tax or duty credit carried forward under any existing law or on goods held in stock on the appointed day.
(1) Every registered person entitled to take credit of input tax under section 140 shall, within ninety days of the appointed day, submit a declaration electronically in FORM GST TRAN-1, duly signed, on the common portal specifying therein, separately, the amount of input tax creditof eligible duties and taxes, as defined in Explanation 2 to section 140, to which he is entitled under the provisions of the said section:
Provided that the Commissioner may, on the recommendations of the Council, extend the period of ninety days by a further period not exceeding ninety days.
Provided further that where the inputs have been received from an Export Oriented Unit or a unit located in Electronic Hardware Technology Park, the credit shall be allowed to the extent as provided in sub-rule (7) of rule 3 of the CENVAT Credit Rules, 2004.
[(1A) Notwithstanding anything contained in sub-rule (1), the Commissioner may, on the recommendations of the Council, extend the date for submitting the declaration electronically in FORM GST TRAN-1 by a further period not beyond [[31st March, 2020] 251] 252 , in respect of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and in respect of whom the Council has made a recommendation for such extension.]
(2) Every declaration under sub-rule (1) shall
(a) in the case of a claim under sub-section (2) of section140, specify separately the following particulars in respect of every item of capital goods as on the appointed day
- (i) the amount of tax or duty availed or utilized by way of input tax credit under each of the existing laws till the appointed day; and
- (ii) the amount of tax or duty yet to be availed or utilized by way of input tax credit under each of the existing laws till the appointed day;
(b) in the case of a claim under sub-section (3) or clause (b) of sub-section (4) or subsection (6) or sub-section (8) of section 140, specify separately the details of stock held on the appointed day;
(c) in the case of a claim under sub-section (5) of section 140, furnish the following details, namely:-
- (i) the name of the supplier, serial number and date of issue of the invoice by the supplier or any document on the basis of which credit of input tax was admissible under the existing law;
- (ii) the description and value of the goods or services;
- (iii) the quantity in case of goods and the unit or unit quantity code thereof;
- (iv) the amount of eligible taxes and duties or, as the case may be, the value added tax [or entry tax] charged by the supplier in respect of the goods or services; and
- (v) the date on which the receipt of goods or services is entered in the books of account of the recipient.
(3) The amount of credit specified in the application in FORM GST TRAN-1 shall be credited to the electronic credit ledger of the applicant maintained in FORM GST PMT-2 on the common portal.
(4) (a) (i) A registered person who was not registered under the existing law shall, in accordance with the proviso to sub-section (3) of section 140, be allowed to avail of input tax credit on goods (on which the duty of central excise or, as the case may be, additional duties of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975, is leviable) held in stock on the appointed day in respect of which he is not in possession of any document evidencing payment of central excise duty.
(ii) The input tax credit referred to in sub-clause (i) shall be allowed at the rate of sixty per cent. on such goods which attract central tax at the rate of nine per cent. or more and forty per cent. for other goods of the central tax applicable on supply of such goods after the appointed date and shall be credited after the central tax payable on such supply has been paid:
Provided that where integrated tax is paid on such goods, the amount of credit shall be allowed at the rate of thirty per cent. and twenty per cent. respectively of the said tax;
(iii) The scheme shall be available for six tax periods from the appointed date.
(b) The credit of central tax shall be availed subject to satisfying the following conditions, namely:-
(i) such goods were not unconditionally exempt from the whole of the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985 or were not nil rated in the said Schedule;
(ii) the document for procurement of such goods is available with the registered person;
(iii) The registered person availing of this scheme and having furnished the details of stock held by him in accordance with the provisions of clause (b) of sub-rule (2), submits a statement in FORM GST TRAN 2by 31st March 2018, or within such period as extended by the Commissioner, on the recommendations of the Council, for eachof the six tax periods during which the scheme is in operation indicating therein, the details of supplies of such goods effected during the tax period:]
[Provided that the registered persons filing the declaration in FORM GST TRAN-1 in accordance withsub-rule (1A), may submit the statement in FORM GST TRAN-2 by [[30th April, 2020]
(iv) the amount of credit allowed shall be credited to the electronic credit ledger of the applicant maintained in FORM GST PMT-2 on the common portal; and
(v) the stock of goods on which the credit is availed is so stored that it can be easily identified by the registered person.
118.Declaration to be made under clause (c) of sub-section (11) of section 142.
Every person to whom the provision of clause (c) of sub-section (11) of section 142 applies, shall within [the period specified in rule 117 or such further period as extended by the Commissioner]257, submit a declaration electronically in FORM GST TRAN-1 furnishing the proportion of supply on which Value Added Tax or service tax has been paid before the appointed day but the supply is made after the appointed day, and the Input Tax Credit admissible thereon.
119. Declaration of stock held by a principal and job-worker.
Every person to whom the provisions of section 141 apply shall, within [the period specified in rule 117 or such further period as extended by the Commissioner] 258, submit a declaration electronically in FORM GST TRAN-1, specifying therein, the stock of the inputs, semi-finished goods or finished goods, as applicable, held by him on the appointed day.
120. Details of goods sent on approval basis
Every person having sent goods on approval under the existing law and to whom sub-section (12) of section 142 applies shall, within [the period specified in rule 117 or such further period as extended by the Commissioner]259 , submit details of such goods sent on approval in FORM GST TRAN-1
[120A.[Revision of declaration in FORM GST TRAN-1]
Every registered person who has submitted a declaration electronically in FORM GST TRAN-1 within the time period specified in rule 117, rule 118, rule 119 and rule 120 may revise such declaration once and submit the revised declaration in FORM GST TRAN-1electronically on the common portal within the time period specified in the said rules or such further period as may be extended by the Commissioner in this behalf.]
121. Recovery of credit wrongly availed.
The amount credited under sub-rule (3) of rule 117 may be verified and proceedings under section 73 or, as the case may be, section 74 shall be initiated in respect of any credit wrongly availed, whether wholly or partly.
sir, Kindly explain the four parts under Form 7 (a, b, c, d) of TRAN-1 on the GSTN website – all are too confusing and nowhere there is any explanation on how to fill these forms, which are required for whom etc etc.
Are all these (7a to 7d) forms mandatory for everyone claiming ITC on opening stock?
I am a dealer of finished goods (electric/electronic) claiming input tax credit only for the closing stock held on 30 June 2017 (I am not claiming any VAT Input credit of the past month), whether all these 4 sections be filled? And that too, invoice wise?
If so, Is there any Excel upload format?
1) Whether the total of all different products under same HSN should be provided together, or is it invoice-wise?
2) What is the meaning of “Eligible Duties Paid on Such inputs”? (Is it the 60%/40% of CGST/SGST amount?)
1) Should this be filed invoice wise? For whom does this apply?
1) What is this “Number” (Is it HSN?)
2) What is this “Tax Paid” – Is it VAT paid amount or 60%/40% eligibile amount?
Many thanks in advance.
our supplier from outside India than how can i fill tab 7 b (Registration no. of supplier/Input Service Distributor ) because they have not registration no-
Sir, all our purchases are interstate purchases against “C” form at 2%. Are we eligible for any form for credit (Input tax / credit under transitional provision.) Please let us know.
1)Scenario :Services are provided before June 30, 2017, Invoice raised before June 30, 2017 but payment made after June 30, 2017, Invoice Issued to Customer on or after 7th July 17.
Query: a) Whether those Invoices can be accounted in July 17 accounts
b) Whether they can be accounted under service tax regime instead of GST
c) In case of Reverse charge liability how the company pay the same. If these are accounted in July 17 Can the company pay service tax on or before 6th August
d) can the Company does the ISD Distribution for the same
SIR WE ARE DEALS IN EARTHMOVING SPARES .WE HAVE STOCK OF EARLIER VAT PURCHASE 5% AND 2% AGAINST CST /VAT !3.5%. WHAT ABOUT OUR EXISTING STOCK WITH US. HOW WE CAN PROCESS FUTHER FOR GST.PLEASE ADVICE.
SIR , IWILL HAVING CLOSING STOCKS OF MORE VALUE IN 1ST JULY 2017, IN WHICH PRESENTLY VAT RATE IS 5 % AND IN GST RATE IS 12% ON SUCH GOODS, HOWEVER i PURCHASED GOODS FROM INTER STATE FROM MANUFACTURING COMPANY W, WHICH IS EXCIOSE EXEMPTION UNIT, SO ON ON THERE INVOICE CHARGE 1 % CST ON C-FORM CONDITIONS, AND I ALSO PAID 1% ENTRY TAX ION OUR STATE ON SAID GOODS. BUT WHILE I WILL SALE IN THE MONTH OF JULY GST WILL BE 12% BUT PREVOIUSLY I AM SELLING THE GOODS CHARGING 5 % VAT TO OUR RECEIPENTS . SO IN THIS PROCESS I WILL FACE 7 % LOSSES. . I WOUYLD NOT SALE THE GOODS BY INCREASING THE SALE VALE BECAUSE THERE HEAVY COMPITITION. IF THERE IS ANY PROVISIONS BY WHICH I WILL NO FACE THE LOSS PLEASE SUGGEST SIR.
No solution is available in your case other than if manufacturer will pass benefit of non transferable input tax (CST + Entry tax(if applicable) on RM purchased from out of state).
Existing tax GST system
Sales 100 100
CST 1 –
Total 101 100
Entry Tax @1% say 1 –
GST – 12
Total 102 112
Input Credit – 12
Net Cost to dealer 102 100
Add profit say 18 18
Total Sales price 120 118
VAT 6 –
GST – 14.16
Tota 126 132 .16
Customer to shell out more 6.16