A big relief by Supreme Court to taxpayers regarding GST Transitional Credit

Arjuna (Fictional Character): Krishna, what is the buzz going around regarding TRAN-1 and TRAN-2?

Krishna (Fictional Character): Arjuna, CBIC issued Circular No. 180/12/2022-GST on 9th Sept,2022 following the judgement of Hon'ble Supreme Court in the case of Union of India vs. Filco Trade Centre Pvt. Ltd. with respect to guidelines for filing/revising TRAN-1/ TRAN-2.

Arjuna (Fictional Character): Krishna, What is form GST TRAN-1 and TRAN-2 ?

Krishna (Fictional Character): Arjuna, TRAN-1 form is required to be filled by taxpayer who is entitled to carry forward Input tax credit from earlier regime to GST regime. TRAN-2 form is required to be filled by taxpayer who has registered for GST but was unregistered under the old regime to claim tax credit on stocks held by them on 30th June, 2017.

Arjuna (Fictional Character): Krishna, what are the new guidelines for TRAN-1 and TRAN-2?

Krishna (Fictional Character): Arjuna, the facility for filing TRAN-1/ TRAN-2 or revising the earlier filed TRAN-1/TRAN-2 will be made available by GSTN during the period from 01.10.2022 to 30.11.2022 on the common portal. The taxpayer shall also upload the pdf copy of a declaration at the time of filing or revising the declaration in FORM GST TRAN-1/TRAN-2. The taxpayer claiming credit in table 7A of FORM GST TRAN-1 on the basis of Credit Transfer Document (CTD) shall also upload pdf copy of TRANS-3, on the common portal. The taxpayer should also take into consideration that no claim for transitional credit shall be filed in table 5(b) & 5(c) of FORM GST TRAN-1 in respect of such C-Forms, F-Forms and H/I-Forms which have been issued after the due date prescribed for submitting the declaration in FORM GST TRAN-1 i.e. after 27.12.2017. Tax officers will verify the claims and will pass an order after which credit will be provided in the electronic credit ledger. This is a departure from the earlier procedure where credit used to first transition to electronic credit ledger on self-assessment and later an audit was undertaken.

Arjuna (Fictional Character): Krishna, Whether taxpayer who has successfully filed TRAN-1/TRAN-2 and whose transitional credit is disallowed are required to file/ revise TRAN-1/TRAN-2?

Krishna (Fictional Character): Arjuna, the taxpayer who had successfully filed TRAN-1/TRAN-2 earlier, and who do not require to make any revision in the same, are not required to file/ revise TRAN-1/TRAN-2 during this period from 01.10.2022 to 30.11.2022. Also, in such cases where credit was disallowed in the past in transitional form audit, then such taxpayer need not file fresh forms and they should prefer an appeal against such order.

Arjuna (Fictional Character): Krishna, what lesson we should take from this?

Krishna (Fictional Character): Arjuna, the option of filing or revising TRAN-1 is a one-time opportunity for the taxpayer to either revise the forms earlier filed or to file the said forms, if not filed earlier. The taxpayer is required to take utmost care and precaution while filing or revising TRAN1/TRAN-2 and thoroughly check the details before filing his claim on the common portal.