Transitional credit

India gear up with GST 3B which would be followed by GST R1 for the month of July and August, many business and traders find themselves lost with respect in the tax paid in previous tax regime under VAT, Service Tax, Exercise Tax, etc. for the same there is a provision to file TRAN-1 for the avail tax credit from previous tax regime before GST.

The TRAN-1 can be filed by the registered person under new GST law who were registered under the old laws of indirect tax as well as.

In this matter, Delhi High court had passed a judgment that a period of 90 days for claiming the input tax credit in TRAN-1 is a directory and therefore, a period of limitation of 3 years under the Limitation Act would apply.  ️The Court has directed the Department to allow all assesses to claim an input tax credit in TRAN-1 by 30.6.2020.  The direction would apply to all those who could not file TRAN-1 and claim an input tax credit. ️The court has further directed that it should be advertised that all taxpayers who have not filed TRAN 1 can do so by 30.6.2020. The judgment has been made applicable to all irrespective of whether the taxpayer has approached the court or not.

How to file GST TRAN 1?

The following guidelines for TRAN-1

1. Fill the listed columns in the form with accurate details as per the business you are claiming the tax credit for. Take care in filling the details for GSTIN, Registered Person’s Legal Name, and Trade Name.
2. Ensure that you have filed the necessary returns under the previous laws of VAT/Excise/Service Tax for the past 6 months.
3. Calculate and specify the amount of tax credit you want to claim through this form in Column 5. Under this column, there are further columns where you can provide the breakup in the following format-

• Table 5(a) is for claiming credit of central taxes (excise and service tax) which have to be carried forward as Central Tax in GST. You would be required to mention the Excise or Service Tax Registration Number. Select the tax period for which the last return is filed and the date of filing of last return has to be mentioned. The Balance amount which was carried forward in the last return has to be specified. Out of that amount, you have to mention how much amount is admissible as ITC in GST as Central Tax.
• Table 5 (b) is for persons who are registered under VAT and CST and would be required to fill details of C-form, F-forms, and H-forms for which assessment is pending. Also, it would be required to fill details such as a TIN of issuer, name of the issuer, Serial Number of such Form, Amount, and VAT rate as applicable.
• Table 5 (c) is for claiming credit of State taxes (VAT) which have to be carried forward as State/UT Tax in GST. Here, one has to fill the VAT registration number and mention the amount of ITC remaining in the last VAT return. It is also required to fill turnover for which C forms and F forms are pending along with different tax payable thereon, along with the amount of ITC which is liable to be reversed due to such C Forms and F forms. One has to fill exact transition credit of ITC which has to be claimed as State Tax under GST after deduction amount liable to be reversed.