Some useful points before finalizing TRAN-1 (practical point of view)-
1) Rule 117 (1) - "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"
2) Sec 140 (5) talks about the situation where the taxes or duties were paid in the old laws but the goods/ services received after July 1, 2017 then INPUT related to these items will be allowed provided that such transactions are being recorded within 30 days from 1 July 2017
Hence care should be taken about those items which are being received later i.e. after 31 July 2017. Also in such cases details of such transactions are to be given in e..g.name of supplier, description of value, quantity etc in TRAN 1,
3) TRAN 1 total credit will be reflected in PMT-2 i.e. Electronic credit ledger,
4) Sec 142 (1) talks about a situation where goods were supplied and duty had been paid within 6 months prior to July 1 , 2017 and if these goods are returned back to the business then refund will be allowed on such duty paid , however please note the below -
a) The goods returned must be from UNREGISTERED person only,
b) provision applies only for GOODS and NOT FOR SERVICES,
c) If goods returned from REGISTERED PERSON then it will be TREATED AS DEEMED SUPPLY,
5) Any REFUND/ appeal revisions etc -either initiated before/on July 1/ or after will be refunded based on Old laws, However recoveries will be made in GST laws if not recovered in old laws- refer sec 142(3),
6) In case of ISD - if the Invoices have been received after July 1, 2017 then ALSO CREDIT can be distributed among the location which were declared under old laws, also refer Table 8,
7) If someone was registered under VAT/ excise etc will be able to take all that have been shown in its last return under old laws as on 30 June 2017 subject to fulfilling conditions. However capital goods related REMAINING portion will be allowed to be carried over by filling TABLE 6 > and there will be very selective instances where department will make an inquiry about the details of credit related to such capital goods,
8) Krishi Kalyan Cess, Education Cess etc which are showing in the return filed as on 30 June 2017 under old laws will not be carried over in TRAN 1 as these taxes are not allowed as input credit under GST laws,
9) Table 5(b) require to provide form C/F etc which will be eligible for REFUND only and no credit will be allowed,
10) If someone was not registered under old laws and now registered under the GST then whatever inputs used to manufacture goods and any raw material/ WIP lying as on 30 June 2017 will be allowed to be carried over as eligible credit unless the items are not used in supplying taxable supplies,
11) If someone was under COMPOSITION scheme under old laws (composition scheme was only available under VAT laws) and now OPT for normal registration then please careful to note that NO CREDIT on capital goods remaining will be allowed to be carried over & no service related input will be allowed to be carried over,
12) Documents possession is important (applicable only goods bought upto 30 June 2016) unless deemed credit (60%/ 40% ) provisions will apply and if it is possible to get CTD then it should be issued as per notification 21/2017, for this TABLE 7 to be filled in,
13) If there are some exempt & dutiable goods which are being dealt by the person under old laws and now all became taxable then also remaining credit on CAPITAL GOODS is allowed to be carried over,
14) If there were completely exempted goods in which person was dealing under OLD laws then if these became dutiable under GST then ITC is allowed on stock which is used in finished goods/ raw material/ WIP etc however NO credit on CAPITAL GOODS & INPUT ON SERVICES will be allowed to be carried over,
15) CTD related provisions are related to excise duty only and not applicable for imported goods and can be used only by TRADERS who do not have excise related documents for which 45 days is time period and also the value of goods should be 25,000 or more,
16) TRAN 2 will be filled for deemed credit availed by traders and such credit will be available when goods are sold off but it should be before 31 Dec 2017,
The author can also be reached at agrawal.anuj@icai.org
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