GST TRANSITION PROVISIONS & GST TRAN 1. CTC Indirect Tax Study Circle Meeting

Transcription

1 GST TRANSITION PROVISIONS & GST TRAN 1 CTC Indirect Tax Study Circle Meeting 25 th July 2017 CA Shrenik A Shah Partner Ashwin K Shah & Co LLP 7, Chemox House, Barrack Lane, Mumbai

2 Mapping of Statutory Information Relevant Provisions of the CGST/SGST Act Relevant Rule of the CGST Rules 2017 Reference to GST TRAN 1 Relevant for Goods / Services / Both Gist 140(1) 117(1) Pt.5(a), (b) & (c) Both Cenvat Credit & VAT / ET Credit carried forward in the returns 140(4)(a) read with section 140(1) 117(1) Pt.5(a), (b) & (c) Both Cenvat Credit & VAT / ET Credit carried forward in the returns filed by an assessee engaged in exempt and taxable supplies under existing law 140(2) 117(1) & (2)(a) Pt.6(a) & (b) Capital Goods Unavailed Cenvat Credit/VAT/ET credit as regards Capital Goods 140(3) 117(1) & 2(b) Pt.7(a) & (c) Goods held as inputs or as forming part of any semi finished or finished goods & supported by invoices or other tax paying document Eligible Cenvat / VAT Credit available on inputs as such or as lying in the semi finished or finished goods to a variety of assessees not covered by 140(1) 140(4)(b) read with section 140(3) 117(1) & 2(b) Pt.7(a) & (c) Goods held as inputs or as forming part of any semi finished or finished goods & supported by invoices or other tax paying document Eligible Cenvat / VAT Credit available on inputs as such or as lying in the semi finished or finished goods to an assessee engaged in exempt and taxable supplies under existing law

3 Mapping of Statutory Information Relevant Provisions of the CGST/SGST Act Relevant Rule of the CGST Rules 2017 Reference to GST TRAN 1 Relevant for Goods / Services / Both Gist 140(6) 117(1) & 2(b) Pt.7(a) & (c) Goods held as inputs or as forming part of any semi finished or finished goods & supported by invoices or other tax paying document Eligible Cenvat & VAT Credit available on inputs as such or as lying in the semi finished or finished goods to assessees who are paying tax at the fixed rate or fixed amount Proviso to 140(3) 117(1), 2(b) & (4) Pt.7(b) & (c) Goods held as inputs or as forming part of any semi finished or finished goods & not supported by invoices or other tax paying document Rebate of CGST paid on supply of inputs as such or as lying in the semi finished or finished goods to a variety of assessees not covered by 140(1) 140(4)(b) read with Proviso to section 140(3) 117(1), 2(b) & 4 Pt.7(b) & (c) Goods held as inputs or as forming part of any semi finished or finished goods & supported by invoices or other tax paying document Rebate of CGST paid on supply of inputs as such or as lying in the semi finished or finished goods to an assessee engaged in exempt and taxable supplies under existing law 140(5) 117(1) & 2(c) Pt.7(b) Both Eligible Cenvat & VAT/ET credit in relation to Supplies received after AD but taxes paid by supplier prior to AD 140(7) NA NA Services Services received prior to AD & invoice received after AD by an Input Service Distributor 140(8) NA Pt.8 Services Carry Forward & Distribution of Cenvat Credit by an assessee who has obtained Centralised Registration 140(9) NA NA Services Cenvat Credit, once reversed on account of non-payment, can be re-claimed once payment is effected

4 Mapping of Statutory Information Relevant Provisions of the CGST/SGST Act Relevant Rule of the CGST Rules 2017 Reference to GST TRAN 1 Relevant for Goods / Services / Both Gist 141(4) 119 Pt.9 Inputs, semi-finished or finished goods Details of Stocks of the Principal lying with the job worker 142(1) NA NA Goods Credit adjustment on account of Goods Return 142(2) NA NA Both Effects of debit notes and Credit notes for supplies made prior to AD 142(3) NA NA Both Disposal on pending refund claims or claims made under existing laws 142(4) NA NA Both Disposal of pending refund claims or claims made under existing laws on account of exports 142(5) NA NA Both Disposal of pending refund claims or claims made under existing laws 142(6) NA NA Both Disposal of appeal, review & reference under existing laws in connection with Cenvat Credit 142(7) NA NA Both Disposal of appeal, review & reference under existing laws in connection with Output Liability 142(8) NA NA Both Disposal of assessment/adjudication under existing law as regards tax, interest, penalty, etc 142(9) NA NA Both Filing of revised returns that in effect give rise to an additional tax liability or additional tax refund 142(10) NA NA Both Supplies in connection with contracts entered into prior to appointed day & continued after AD

5 Mapping of Statutory Information Relevant Provisions of the CGST/SGST Act Relevant Rule of the CGST Rules 2017 Reference to GST TRAN 1 Relevant for Goods / Services / Both Gist 142(11)(a) NA NA Goods Supplies liable to VAT only and have suffered VAT will not be liable to GST 142(11)(b) NA NA Services Supplies liable to service tax only and have suffered service tax will not be liable to GST 142(11)(c) 120 Section 11 Both Supplies liable to VAT & service tax will be liable to GST to the extent of supplies effected under GST 142(12) NA Section 12 Goods Goods sent on sale or approval within 6 months prior to AD & returned within 6 months from AD or the extended period of 2 months thereafter 142(13) NA NA Goods No TDS required under GST in respect of payments made after AD for invoices raised prior to AD coupled with sale of goods effected prior to AD 142(14) SGST Act Only 119 of MGST Rules Pt.10 Goods held as inputs or as forming part of any semi finished or finished goods or capital goods Entitlement of an agent to claim VAT / ET credit as regards such goods belonging to the Principal

6 Case Study 1 Testing admissibility of available Cenvat Credit u/s.140(1) Whether it is required to test the admissibility under GST law of validly availed Cenvat under existing law How does one map the cenvat credit as on to the probable admissible credits it seems once the credit is validy availed it should not be put under the scanner As regards control samples Bar under section 17(5)(f) does not seem to apply to control samples As regards food/beverages or renovation activity As such should be disallowed while testing admissibility As regards C/H/F/I forms - The intention of 1 st Proviso of Section 140(1) of MGST Act only refers to credit attributable to such forms and does not seem to indicate fresh payment for pending forms. In that light, even though arithmetically there may be a negative balance but it may at best be indicative of NIL credit carry forward Stocks with unregistered job worker - Section 141(4) seems to provide transitional benefits as regards stocks lying with job worker only where the job worker also confirms the holding of such stocks Section 142(3) & (4) provide for disposal of refund claims made on or after AD in relation to the existing law The assessee has the right to either withdraw its refund claim or get it processed under exiting law. It runs of the claim lapsing in case of an adverse view. One will have to visit the concept of re-credit where sout moto credit of the earlier reversed credit is allowable. In that light question of lapsing may not arise. Reference can be made to ICMC Corporation Ltd Vs.CESTAT (2014) 302 ELT 45, Madras High Court decision. Section 140(2) Cenvat Credit on capital goods will be allowable if the said credit is allowable under GST & existing law. In the case of Carpet tiles they do not qualify as capital goods under CCR Rule 2(a) or as inputs under Rule 2(k). The credit will not be available even if for any reason the goods qualify the test u/s.17(5)(d)

7 Case Study 2 Section 140(3) - Person not liable to obtain registration under existing law As regards export of services, the said services are not required to be included in the aggregate value of turnover for availing threshold based exemption. Section 66B under FA 1994 deals with tax on services rendered in taxable territory. Rule 2(e) excludes exported services from the definition of exempted services. In that light liability to register would not arise. The activity seems to be that of a job worker. Whether admissibility of the inputs will warrant the visiting of provisions of Rule 53(6) of MVAT Rules. The said Rule seeks to disallow VAT credit on purchases made for use in the course of job work services. There is no need to test the admissibility under existing law as per section 140(3). Hence, should be allowable credit under GST. Section 140(3) deals with eligible cenvat credit as regards inputs or inputs contained in finished or semi finished goods held in stock. Service tax & KKC does not form part of allowable eligible Cenvat Credit under Explanation 1 of Section 140. Hence, will not be eligible Cenvat Credit. The question is whether the client can take registration for service tax on 10 th July 2017 & make the claims in his ST3 returns & thereby make the claim for transition under Section 140(1) instead of 140(3). Proviso to Rule 53(6)(b) of MVAT Rules does not allow VAT credit for capital goods used for job work even in case of manufacturers where such person is principally engaged in job work. Hence the VAT credit is not available under existing law. This will disqualify VAT credit under 140(2). The capital goods will qualify for credit under GST for the purpose of Cenvat Credit. It will have to be looked at as to whether the same will qualify as such under CCR 2004.

8 Case Study 3 The firm is staring at an anti-profiteering issue at the outset. Where the assessee is unable to explain the rational of the price rise, it will have to face consequences like forced reduction in prices, refund of excess to consumer, imposition of penalties & cancellation of registration. There are no remedies or safeguards under the transitional provisions for sale price amendments done prior to As regards Cenvat Credit on capital goods used exclusively for the purpose of exempt goods under existing law Rule 6(4) of CCR will have to be taken into account for deciding the admissibility of this credit.

9 Case Study 4 Provisions of Section 142(12) deals with goods sent on sale or approval basis within 6 months from As regards the approval within 6 months it will be treated as a supply under GST & the supplier will have to raise an invoice accordingly As regards returns within 6 months No GST since the returns are within 6 months. This is not a case of sales returns covered by proviso to Section 142(1) As regards returns within 8 months No GST if the extension has been sought from the Commissioner since the returns are beyond 6 months. This is not a case of sales returns covered by proviso to Section 142(1) As regards returns beyond the prescribed time GST will be payable by the person returning the goods as if it were supply under GST If the supplier did not obtain registration the issue would be around 2 nd Proviso to Section 142(12) since the person returning the goods will not levy GST as envisaged. Should one then resort to 3 rd Proviso of Section 142(12) where the liability to pay GST is on the person supplying the goods in the first place. This can be resorted to only if one deems that the goods were not returned within prescribed period. As regards goods sent on approval basis before 6 months from appointed day The benefit of transitional provisions u/s.142(12) will not be available

10 Case Study 5 As per Service Tax Rules 1994 billing can be done u/r.4a of the Rules within 30 days of completion of the service The point of taxation will be the date of issuance of invoice as per POT Rule 3 Provisions of 142(11)(b) refers to cases where the levy of service tax crystallises under the FA 1994 will not be liable to GST In this case the issuance of invoice is within prescribed time - The only apprehension is around the administrative & compliance issues and the manner in which the recipient will claim cenvat credit of the service tax on the invoice. Credit note issued for cancellation of the invoice u/s.142(2)(b) will amount to having made a supply under GST & will accordingly be liable to reversal at the applicable GST rate. The reduction in tax liability on outward supply will have to be correspondingly confirmed by the concerned customer as well. This will not be a reason to revise the return already filed. The assessee can revise its return and make the necessary claim in its revised return. The problem is around c/f of the excess ITC in the ST3 u/s.140(1). Even if such return is revised within prescribed time and before filing GST TRAN 1 form, the assessee will not be allowed to carry forward such excess credit to GST but will have to claim a refund under existing law in accordance with Section 142(9)(b). The enhancement in credit is not covered by the 30 day prescription under section 140(5) since the services were rendered prior to The point of taxation in the case of RCM service tax is mapped to the date of payment for the services. The POTR in the present case is beyond AD but the tax is in fact leviable under section 68(2) of FA Service tax under RCM will be available as credit under GST. The only apprehension is around the administrative & compliance issues since the transition provisions make no specific provision for this. Correspondingly Form GST TRAN 1 also makes no such provision.

11 Case Study 6 Section 140(3) deals with eligible credit of cenvat in connection with inputs and inputs contained in semi finished goods held in stock by a works contractor. There is no reason to disallow credit in connection with the inputs in the case of works contractor. The issue may come up as regards WIP since a view can be taken that it is not inputs or semi-finished goods. As such it seems inputs contained in semi finished goods should take into account WIP As regards a situation of a builder/developer Point is whether a works contractor and a builder can be differentiated under GST any more As such if one looks at the list of eligible persons under 140(3), it seems builder does not fit in any where since he is not works contractor paying service tax under notification 26/2012 under existing law Case of Suresh Kumar Bansal, Delhi High Court, 43 STR, led to retrospective amendment to Rule 2A of Service Tax (Determination of Value) Rules since levy fails where the computation mechanism is missing Works contractor pay tax under Rule 2A & not 26/2012 Should we read the AND as an OR If yes, the credit of the stocks just like a works contractor should be available The issue of whether WIP can be treated as semi-finished GOODS is also a question Credit notes issued amounting to reversal post AD will be covered by 142(2)(b) & proviso thereof this provision will certainly not cover situations of builder/developer v/s. their customers since it refers to reversal of corresponding GST by the registered person Whether cancellation of flat can amount to goods returns Section 142(1) The provision clearly hasn t factored that as a possibility Whether cancellation of the flat is a transitional issue at all? Section 58(4)(c) - Refers to refund of tax paid for supplies that are not provided wholly or partially This seems to be the only option

12 Case Study 7 Rule 6(3A) read with Rule 6(3) of CCR provides for reversal of credits on provisional basis in the currency of the year and then make a final self assessment at the end of the year. Provided this is done prior to filing of the last service tax return & ideally prior to 30 th June 2017, the assessee should be able make the necessary correction.

13 Case Study 8 Discussion around the factors for claiming credit proviso to section 140(3) Rebate after effecting supply under GST Benefit of Rebate to be passed on to the customer Stocks covered by this option to be stored in a manner that they are separately identifiable The stocks in this regard must be exhausted in 6 tax periods Whether one needs to pass on the rebate benefit - Yes How does one tackle assessments to prove that the factors were met Prudence and Due Diligence Additional Compliance in GST TRAN 2

14 Case Study 9 For cases eligible for cash basis payment of service tax For receipts beyond the levy will not be altered. The concern will be liable to pay service tax. The transitional provisions are silent on this matter. Section 142(11)(c) is very clear that were a levy was invited under FA 1994 no levy can fixed under GST. The mode and manner of complying with this & the related ITC issues for the recipient need clarification. The firm is required to migrate and then finally de-register since it is an assessee registered as on the AD

15 GST TRAN -1 A Quick Overview Why GST TRAN 1 Essentially a medium to electronically communicate the key parameters of claiming credits & to provide for coverage in relation to future contingencies as regards closing stocks held as on or supplied prior to AD A medium to populate GST PMT 2 (Electronic Credit Ledger) A basis for assessment & adjudication down the road for claims made in the transition phase Coverage of GST TRAN 1 The Form covers matters relating to Input Tax Credit pertaining to the erstwhile regime to be claimed in the GST regime. The Form logs information relating to stocks of inputs and inputs contained in finished or semi-finished goods lying with third parties. The Form requires providing of information relating to on-going contracts that are liable to VAT & Service Tax till The Form is a common form for claiming State Tax & Central Tax credits. The Form has not been designed to provide information relating to each and every of the probable transactions & circumstances as provided for by Section 139 to 142 of Acts. Recommended process of filing GST TRAN 1 Map the transaction or scenario to the relevant provisions of Section 139 to 142 Visit the provisions of the existing law & GST law to fulfill necessary conditions as prescribed Collect data to be presented in GST TRAN 1 form where it is required so to do File GST TRAN 1 by 30 th September 2017 or an extended period as may be prescribed Ensure that the requisite SGST & CGST credit are properly reflected in GST PMT 2 As such it seems GST TRAN 1 can be filed in parts as well but the integrity check of the information filled in will have to be kept in sight There is no bare provision relating to revision of GST TRAN 1 once it is so filed As a good practice one may want to keep a log of transactions or scenarios covered by the transition provisions but are not required to be presented in GST TRAN 1 form

16 GST TRAN -1 Section 5(a) 5(a) Amount of Cenvat credit carried forward to electronic credit ledger as central tax (Section 140(1) and Section 140(4)(a)) Sl. No. Registration No. under existing law (Central Excise and Service Tax) Tax period to which the last return filed under the existing law pertains Date of filing of the return specified in Column No.3 Balance cenvat credit carried forward in the said last return Cenvat Credit admissible as ITC of central tax in accordance with transitional provisions Total The Section covers Cenvat Credits carried forward in the service tax returns & central excise returns filed The Cenvat Credit is the credit that is being carried forward in the last of such returns with the period thereof ending on The assessee is not expected to provide invoice wise or HSN wise details Evaluating the admissibility of credits can be a tricky proposition The provisions of Rule 117(1) of the CGST Rules seem to suggest that the credits will be restricted to Eligible Credits as referred to in Explanation 2 to Section 140 of CGST Act. One should stick to how Cenvat Credit u/r.3 of CCR 2004 defines Cenvat. The Rules cannot go beyond the intention of the Act. KKC credit as such allowed to only service providers & SAD credit is allowed only to manufacturers. There does not seem to be a bar in making the said claims under the transitional provisions under 140(1)/140(4)(a) The credits reported in this section will appear as CGST credit in GST PMT - 2

17 GST TRAN -1 Section 5(b) & 5(c) 5(b) Details of statutory forms received for which credit is being carried forward Period 1st April, 2015 to 30th June 2017 TIN of Issuer Name of Issuer Sr. No. of Form Amount Applicable VAT Rate C-Form Total F-Form Total H/I-Form Total 5(c) Amount of tax credit forward to electronic credit ledger as State/UT Tax (For all registrations on the same PAN and in the same State) Registration No. in exisiting law Balance of ITC of VAT and [Entry Tax] in last return C Forms F Forms ITC reversal Turnover for Difference tax Turnover for Tax Payable on relatable to (3) which forms payable on (3) which forms (5) and (5) Pending Pending Turnover for which forms Pending H/I Forms Tax payable on (7) Transition ITC 2-( ) This section deals with VAT / ET Credits carried forward in the last return filed for the period ended on The VAT/ET credit in this section will be treated as SGST credit in GST PMT-2 & is subject to differential tax liability arising on account of non-receipt of statutory forms One will be required to provide issuer wise details of Forms Received in Section 5(b) Section 5(c) will require consolidated details of Forms that are not received as on the date of filing GST TRAN-1 What is the basis of requiring the information from to ? There is no statutory basis in the Act or Rules What happens to Credits that were not carried forward in light of Section 50(2) of MVAT, why should one be liable to credit blockage on account of forms pertaining to such period ITC relatable to the forms? How does one get around identifying relatable credit especially but not limited to the case of a manufacturer of goods Forms Information to be given even if there are no pending forms as on the date of filing GST TRAN 1 Formulae in column (7) & (10)??? - The table at pt.5(c) seems to suggest in column 10 that the effective working may turn out negative The first proviso in the respective SGST Act seems clear to only block the credits and does not make reference to payment of differential tax liabilities. In that light negative credit in column 10 will only be indicative it seems, not likely to impact working capital Does it make more sense to claim refund under VAT law by filing form 501 and get done with it

18 GST TRAN -1 Section 6 (a) & (b) 6(a) Amount of unavailed cenvt credit in respect of capital goods carried forward to electronic credit ledger as central tax Sl. No. Invoice / Invoice / Supplier's Recipients' Details of capital goods on which credit has Total eligible Documents No. Document Date registration No. under existing law registration No. under existing law Value been partially availed Duties and taxes paid cenvat credit under existing law 6(b) Total This section deals with Cenvat & VAT / ET Credits in relation to Capital Goods ED / CVD SAD Total cenvat credit availed under existing law Total cenvat credit unavailed under existing law (admissible as ITC of centrtal tax) (9-10) Total Amount of unavailed input tax credit carried forward to electronic credit ledger as State/UT tax (For all registrations on the same PAN and in the same State) Invoice / Datails regarding capital Document goods on which credit is not Date availed Sl. No. Invoice / Document No. Supplier's registration No. under existing law Recipients' registration No. under existing law Total eligible VAT [and ET] credit under existing law Total VAT [and ET] credit availed under existing law Total VAT [and ET] credit unavailed under existing law (admissible as ITC of State/UT tax) (8-9) Value Taxes paid VAT [and ET] The said credits to the extent unavailed under the erstwhile regime can be claimed in the GST Regime Invoice wise details of such fixed assets with the Tax Registration numbers under existing law have to be provided Section 6(a) deals with Cenvat Credit & 6(b) deals with VAT/ET as regards such capital goods Effective ITC on Capital goods = Gross ITC Ineligible ITC ITC availed under existing law Service Tax, ED Cess and SHC are covered by Rule 3 of CCR For example if service tax is paid on installation of a machinery, it should be allowable Cenvat Credit as regards the said capital goods. The headings at column (7) & (9) can be misguiding SAD Claim to Service Providers and KKC claims to Manufacturers are not allowed under existing law. The impact of this issue will have to be factored while computing ineligible ITC

19 What happens to packing material used to pack goods by a trader? Can they be said to be inputs or inputs contained in semi finished or finished goods? 7(a) Sl. No. GST TRAN -1 Section 7 (a) Amount of duties and taxes on inputs claimed as credit excluding the credit claimed under Table 5(a) (under section 140(3), 140(4)(b) and 140(6)) Details of inputs held in stock or inputs contained in semi-finished goods held in stock HSN (at 6 digit level) Unit Qty. Value Eligible Duties paid on such inputs A Where duty paid invoices are available Inputs Inputs contained in semi-finished and finished goods 7B Where duty paid invoices are not available (Applicable only for person other than manufacturer or service provider) - Credit in terms of Rule 117(4) Inputs This section deals with ITC of Eligible Cenvat credits covered by Explanation 1 to Section 140 as forming part of inputs or inputs contained in finished or semi-finished goods Part 7A deals with cases supported by invoices indicating duty payments and thereby covers Eligible Duties as regards inputs or inputs contained in semi-finished or finished goods held in stock as on The ITC in this regard will appear as CGST credit in GST PMT-2 Part 7B deals with cases not supported by invoices showing duty payments in connection with inputs held in stock as on Benefits of rebate of 40%/60% is limited to inputs and does not cover inputs contained in semi finished or finished goods since manufacturers / service providers are not covered here. The requisite credit will be credited to the CGST credit ledger on effecting supply of the stocks in GST regime. The information of such supplies to be provided in GST TRAN-2 over 6 tax periods. The benefit of this provision will not be available to cases covered by 140(6) Invoice wise details of stocks is not required to be presented. Information has to be provided HSN wise. Moreover no tax details will be covered for stocks covered by 7B. The form indicates that 6 digits of HSN are required. This seems incorrect in light of the rate notifications under the Central, State, Integrated & UT tax. It seems incorrect also in light of notification 12/2017 providing for mentioning of HSNs on invoices.

20 7(c) GST TRAN -1 Section 7 (c) & (d) Amount of VAT and Entry Tax paid on inputs supported by invoices/documents evidencing payment of tax carried forward to electronic credit ledgeras SGST/UTGST under sections 140(3), 140(4)(b) and 140(6) Details of inputs in stock Description Unit Qty. Value VAT[and Entry Tax] paid Total input tax credit claimed under earlier law Total input tax credit related to exempt sales not claimed under earlier law Total input tax credit admissible as SGST/UTGST Input Inputs contained in semi-finished and finished goods 7(d) Stock of Goods not supported invoices/documents evidencing payment of tax (credit in terms of Rule 117(4) - to be there only for States having VAT at single point ) Details of Inputs in Stock Desciption Unit Qty Value Tax Paid Section 7(c) deals with ITC of VAT/ET credits duly covered by invoices. The ITC in relation to this credit will appear as SGST credit in GST PMT 2 Section 7(d) deals with rebate benefits of 40% / 60% just like under Central Tax. Nevertheless, the benefit is restricted to State Tax for States having one point levy of VAT. This matter refers to Rule 117(4) of CGST Rules Cases covered by Section 140(6) will not be able to avail the benefit of Rebate claim of 40% / 60% The requisite ITC covered by 7(d) will be credited to the CGST credit ledger on effecting supply of the stocks in GST regime. The information of such supplies to be provided in GST TRAN-2 over 6 tax periods Information in Section 7(c) & (d) will have to be provided based on description of goods. It is advisable to map the HSN to the description.

21 GST TRAN -1 Section 7 (b) 7(b) Amount of eligible duties and taxes/vat/[et] in respect of inputs or input services under section 140(5): Name of the Supplier Invoice number Invoice Date Description Quantity UQC Vaule Eligible duties and taxes VAT/[ET] Date on which entered in recipients books of account This section deals with cases where the supplies are effected after but the invoices are pertaining to a date on or before Invoice details will have to be presented Eligible duties in this case will cover duties as referred to in Explanation 2 to Section 140 KKC is not covered as eligible duties & that must be borne in mind The date of entry in the books of the recepient has to be within 30 days of the date of invoice. This information is required in column (10). Supplier TIN/Registration numbers have not been provided for in here

22 GST TRAN -1 Section 8 8 Details of transfer of cenvat credit for registered person having centrailzed registration under existing law (Section 140(8)) Sl. No. Registration No. under existing law (Centralized) Tax period to which the last return filed under the existing law pertains Date of filing of the return specified in Column No.3 Balance eligible cenvat credit carried forward in the said last return GSTIN of receivers (same PAN) of ITC of CENTRAL TAX Distribution document / invoice No. Date ITC of CENTRAL TAX transferred Total This section deals with distribution of eligible cenvat credit c/f in the return filed for the period ended on by an assessee (HO) who has obtained Centralised Regn. to any of the locations (Branch) covered by such registration The third proviso to Section 140(8) of CGST Act provides for transfer of credit with the HO to any of the branches who are registered under GST The table at column (8 ) provides for the details of credit transferred & maps that to some invoice or document number Should the branches also file GST TRAN 1 to claim the credit but no provision to capture that information This can t be done prior to unless the HO obtains ISD registration Harmonious reading of the Act, Rules and the Form seem to suggest that the invoice for transfer of credit will have to be prepared under GST. The sums shown as transferred will reflect in the respective GST PMT 2 of the branches since GSTIN details are requisitioned The provisions of Rule 117(2) seem to suggest that stock details are required to be provided in relation to the credit carried forward in the ST3 filed by such assessees. There is no question of stock details in so far as the claiming of Cenvat Credit c/f. in return is concerned. The Form GST TRAN 1 makes no such provision The HO may have inputs that are entitled to the credit benefits of 140(3). This claim can be made in GST TRAN 1 form at pt.7. This credit cannot be transferred to the branches as stated in proviso to Section 140(8) as it is not carried forward in the return Where HO does not transfer all the credits how does one ensure that the remaining credit is shown under Section 5(a) of the Form

23 GST TRAN -1 Section 9 9(a) Details of goods sent as principal to the job worker under section 141 Sl. No. Challan No. Challan Date Type of goods (inputs/ semi-finished / finished) Details of goods with job-worker HSN Description Unit Quantity Value GSTIN of Job-worker, if available Total 9(b) Details of goods held in stock as job worker on behalf of the principal under section 141 Sl. No. Challan No. Challan Date Type of goods (inputs/ semi-finished / finished) Details of goods with job-worker HSN Description Unit Quantity Value GSTIN of Manufacturer Total This section deals with providing details of stock of inputs or semi finished goods or finished goods belonging to a Principal that are lying at the premises of its job worker as on Section 9(a) requires the Principal to provide chalan wise information of stocks lying with the job worker duly broken up into HSN The information has to be further broken up HSN wise that in turn can mean several line items for the same chalan or other such document Section 9(b) requires a Job Worker to provide corroborative details to be map the details as provided by the Principal What if the job worker is unregistered how does he upload this information Where requirements of Section 9(b) are not fulfilled it seems that the goods will be deemed to have been supplied & liable to GST in accordance with Section 141(4) Provision or otherwise of details under this section will not impact the entitlement of an assessee u/s.140(1) / (3)

24 GST TRAN -1 Section Details of credit availed in terms of Section 142(11)(c) Sl. No. Registration No. of VAT Service Tax Registration No. Invoice / Document No. Invoice / Document Date Tax Paid VAT paid Taken as SGST Credit or Service Tax paid as Central Tax Credit This Section deals with cases where the assessee is liable to VAT as well as Service Tax under the existing laws The provisions of Section 142(11)(c) seek to capture information relating to on going contracts to the extent of supplies made under the GST regime One will have to provide for the invoices in relation to which supplies will take place post & thereby claim credit of the VAT/Service tax paid against the GST payable

25 GST TRAN -1 Section Details of goods sent on approval basis six months prior to the appointed day (section 142(12)) Sl. No. Decument No. Document Dte GSTIN No. of recipient, (if applicable) Name & Address of recipient Details of goods sent on approval basis HSN Description Unit Quantity Value Total This Section deals with goods that have been sent out on sale or approval basis within 6 months immediately preceding It is not required to provide corroborative basis of stocks held by third parties unlike in the case of agent/principal or job worker/principal situation The information has to be provided document wise that could be a chalan or any other document of a like nature The information has to be further broken up HSN wise that in turn can mean several line items for the same chalan or other such document

26 GST TRAN -1 Some Misses The Form does not seem to cover issues covered by Section 140(9) relating to re-claim of cenvat credit in case of invoices where the credit was reversed on account of non-payment of the said invoice under the existing law that are eligible to be claimed under GST on payment on or before Section 140(9) seems to pre-suppose the filing of return and that the person is registered Can one severe the relationship between 140(3) & 140(9) and 140(1) & 140(9) must be read in light of Rule 4(7) & 4(1) of CCR 2004 The Form makes no provision to provide for Cenvat Credit reversal details on account of this issue GSTR 2 Clause 11 may be used to capture details of reclaim

27 Thank You!