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1. Transitional Provisions in GST Circular No. 180/2022 dated 09.09.2022 Filing of TRAN 1/ TRAN2 Deepak Mata, Deputy Commissioner, CC Office, Mumbai

2. Presentation Plan

3. Legal Framework

4. Officers, within ninety days, will be required 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. Verify Take comments from the counterpart officer Give Notice…. Give PH Decide ……. Order Before 28.02.2022 Hon’ble SC in Misc Application No. 1545-46 of 2022 clarified that all questions of law decided by the respective High Courts concerning Section 140 of the CGST Act, 2017 read with the corresponding Rule/Notification or direction are kept open.

5. Hon’ble SC orders dated 22.07.2022 & 02.09.2022 in UOI vs M/s. Filco Trade Centre Pvt. Ltd

6. Source: CAG Report No. 5 of 2022 ( GST)

7. Forms and table for transition credit Form Table Legal Provision Transition Credit Component TRAN 1 5a Section 140(1) & 140(4)(a) Closing balance of credit from the last legacy returns 5b & 5c C, F, H/I Forms TRAN 1 6a Section 140(2) Un-availed credit on capital goods- Central Tax 6b Un-availed credit on capital goods- State Tax TRAN 1 7(a)A Section 140(3), (4), (5) & (6) Credit on duty paid stock with invoices 7(a)B Credit on duty paid stock without invoices 7b Credit on duty paid goods with invoices- State taxes 7c Credit on duty paid goods without invoices- State taxes

8. Forms and table for transition credit ( Contd ) TRAN 1 8 Section 140(8) Transfer of credit by centrally registered units TRAN 1 9(a) Section 141 Details of goods sent as principal to the job worker 9(b) Details of goods held in stock as job worker on behalf of the principal TRAN 1 10(a) Section 142(14) Details of goods held as agent on behalf of the principal 10(b) Details of goods held by the agent TRAN 1 11 Section 142(11)(c) VAT paid Taken as SGST Credit or Service Tax paid as Central Tax Credit TRAN 1 12 Section 142(12) Details of goods sent on approval basis six months prior to 1st July 2017 TRAN 2 4   Credit afforded on stocks claimed without invoices

9. Explanation 1 : Eligible Duties [For sub-sections (1), (3), (4) and (6)] (In respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on appointed day ) Sr. Type of Duty Leviable Under Remarks ( i ) Additional Duty of Excise Section 3 of Additional Duties of Excise (Goods of Special Importance Act) 1957 AED (GSI) (ii) Additional Duty Section 3(1) of Customs Tariff Act , 1975 CVD (CE) (iii) Additional Duty Section 3(5) of Customs Tariff Act , 1975 CVD (VAT) 4% (iv) Omitted --- --- (v) Duty of Excise First Schedule of Central Excise Tariff Act, 1985 BED (vi) Duty of Excise Second Schedule of Central Excise Tariff Act, 1985 SED (vii) National Calamity Contingent Duty Section 136 of Finance Act 2001 NCCD

10. Explanation 2 : Eligible Duties and Taxes [For sub-section (1) and (5)] (in respect of inputs and input services received on or after appointed day ) Sr. Type of Duty Leviable Under Remarks ( i ) Additional Duty of Excise Section 3 of Additional Duties of Excise (Goods of Special Importance Act) 1957 AED (GSI) (ii) Additional Duty Section 3(1) of Customs Tariff Act , 1975 CVD (CE) (iii) Additional Duty Section 3(5) of Customs Tariff Act , 1975 CVD (VAT) 4% (iv) Omitted --- --- (v) Duty of Excise First Schedule of Central Excise Tariff Act, 1985 BED (vi) Duty of Excise Second Schedule of Central Excise Tariff Act, 1985 SED (vii) National Calamity Contingent Duty Section 136 of Finance Act 2001 NCCD (viii) Service Tax Section 66B of the Finance Act 1994 ST

11. Explanation 3 : Exclusion of Cess The expression “ eligible duties and taxes ” excludes any cess which has NOT been specified in Explanation 1 or Explanation 2; and any cess which is collected as additional duty of customs under sub-section ( 1) of section 3 of the Customs Tariff Act, 1975 .’.

12. Eligible Tax? Discrepancies Examples

13. Eligible Tax? Discrepancies Examples

14. Carry forward of CENVAT Credit – Sec 140(1)

15. Unavailed CENVAT Credit on Capital goods –Sec 140(2)

16. Credit of eligible duties and taxes on input held in stock – Sec 140(3) Person eligible for input tax credit Person not liable to be registered under the existing law ; Person engaged in manufacture / sale of exempted goods, provision of exempted services ; Person providing works contract service and availing abatement under notification no. 26/2012; First / Second stage dealer, importer, or depot of a manufacturer. Credit available on Inputs held in stock and inputs contained in semi-finished goods or finished goods held in stock as on appointed day Above benefit not available for input services Such credit can be taken in the electronic credit ledger Conditions Goods must be used or intended to be used for taxable supplies Reg person eligible to take the credit under GST law Such person should be in possession of invoice or other prescribed document evidencing payment of duty under the existing law in respect of such inputs Invoice or other document should be within 12 months from the appointed day S. 140(3)(iv) the supplier of services is not eligible for any abatement under this Act Excess claims will be recovered as arrears of tax under GST law

17. Section 140(3)(iv)- FILCO Trade Centre P Ltd case

18. Credit of eligible duties and taxes on input held in stock - no documentary evidence– Sec 140(3) Person eligible for input tax credit a registered person, other than a manufacturer or a supplier of services( e.g Trader ) . not in possession of an invoice or any other documents evidencing payment of duty in respect of inputs Credit available on Inputs held in stock and inputs contained in semi-finished goods or finished goods held in stock as on appointed day Above benefit not available for input services Such credit can be taken in the electronic credit ledger Amount of Credit that can be availed 60% of the CGST paid if Rate under CGST is 9% or more 30% of the IGST paid if Rate under IGST is 18% or more 40% of CGST paid if in rate under CGST is less than 9% 20% of IGST paid if in rate under IGST is less than 18% (Ref Rule 117(4) of CGST Rules, 2017) Similar provisions have been notified under SGST Act(s) for the credit of VAT to be allowed to trader in case of MRP based valuation where tax is paid at first point only. Statement in Form GST TRAN 2 to be submitted at end of each of 6 tax periods during which such scheme is in operation.

19. Credit of eligible duties and taxes on input held in stock – Sec 140(4) A registered person who was engaged in the manufacture/ provision of exempted and taxable goods/ services under Central Excise/ Service tax will be entitled to take the following amounts of CENVAT credit in his electronic credit ledger:- Amount carried forward in the return furnished under earlier law; Amount of eligible duties contained in inputs held in stock and inputs contained in semi-finished goods/ finished goods held in stock on the appointed day relating to exempted goods/ services. Subject to following conditions: The person must be a registered person under the GST Laws. In terms of the Rule 117 of CGST Rules, 2017 the application in Form GST TRANS -01 shall specify separately the details of stock held on the appointed day upto 6 tax periods indicating the details of supplies effected during each tax period

20. Credit of eligible duties and taxes on inputs / input services during transit – Sec 140(5) CGST A registered person is entitled to take credit in the electronic credit ledger of eligible duties and taxes on inputs/input services received on/after 1 st July 2017 but the duty/tax has been paid by the supplier under the existing law Condition: Invoice / any other duty/tax paying document recorded in the books of accounts within 30 days from the appointed day SGST A registered taxable person shall be entitled to take credit in his electronic credit ledger of VAT and Entry tax on inputs received on/after the appointed day but tax has been paid by the supplier under the existing law Condition: Invoice / other tax-paying document recorded in the books of accounts within 30 days from the appointed day

21. Credit of duties on inputs held in stock on switching over from composition scheme - Sec 140 (6) Person eligible for input tax credit A registered person who was paying tax under composition scheme. Credit available on Inputs held in stock and inputs contained in semi-finished goods or finished goods held in stock as on appointed day Above benefit not available for input services Such credit can be taken in the electronic credit ledger Conditions Person not paying taxes under composition scheme under GST law Goods must be used for taxable supply Otherwise eligible to take the credit under GST law Such person should be in possession of invoice / other prescribed document Invoices / other prescribed document was not issued earlier than 12 months preceding appointed day Rule 117 of CGST Rules, 2017- FORM TRAN-1 to be filed specifying eligible ITC amount. Scheme available upto 6 tax periods

22. Credit distribution of service tax by ISD (CGST) – Sec 140(7)

23. Credit distribution of service tax by ISD (CGST) – Sec 140(7) SGST

24. Nuvoco Vistas Corporation Ltd- WP No. 437/2020; BHC Order dated 17.11.2022

25. Nuvoco Vistas Corporation Ltd- WP No. 437/2020; BHC Order dated 17.11.2022

26. Credit distribution of service tax by ISD (CGST) – Sec 140(7)

27. Transfer of unutilised CENVAT credit by a person having centralised registration – Sec 140(8) For the period ending with the day immediately preceding the appointed day If the taxable person files an original / revised return within 3 months of the appointed day Credit will be allowed if credit amount is reduced from that claimed earlier Note: Only those credits which are admissible under GST laws will be allowed Credit may be transferred to any registered person having the same PAN for which centralised registration was obtained under earlier law Application in Form TRAN-1 within 90 days from appointed date

28. Availing credit in certain cases – Sec 140(9)

29. Inputs removed for Job work and returned on or after the appointed day – Sec 141(1)

30. Semi-finished goods removed for Job work and returned on or after the appointed day – Sec 141(2)

31. Finished goods removed for carrying out certain processes and retuned on or after the appointed day – Sec 141(3)

32. Goods returned to the place of business on or after the appointed day – Sec 142(1)

33. Goods returned to the place of business on or after the appointed day – Sec 142(1)

34. Issue of supplementary invoice, etc. where price is revised in pursuance of a contract – Sec 142(2)

35. Issue of supplementary invoice, etc. where price is revised in pursuance of a contract – Sec 142(2)

36. Pending refund claims to be disposed off under existing law – Sec 142(3)

37. Pending refund claims to be disposed off under existing law – Sec 142(3)