TRAN 1 Format, Due Date - Transition Of Old Input Credit To GST Regime

TRAN 1 Format, Due Date - Transition Of Old Input Credit To GST Regime

How To Claim ITC On Old Stock?

Broad Aspects Of The Transition To GST

Things To Remember For Transition To GST

Information Required In TRAN 1

Making sure that firms registered under GST don't lose out on the tax advantages and input credits of the previous system is a top priority. These taxes might have been paid when buying components, raw materials, semi-finished goods, finished goods, or materials that were given to the labour force. On July 30th, these taxes will be accessible to the majority of enterprises as an input credit. Moving these to the GST regime is essential to take benefit of them.

Businesses can transfer credit from the previous tax system to the GST using the transaction rules and formats provided by the Central Board of Excise and Customs.

How To Claim ITC On Old Stock?

Any business having a closing stock - whether registered or not before GST, will be entitled to claim credit of tax paid under the pre-GST regime. To help a business transactions smoothly and carry forward their input tax credit, the CBEC has released 2 Transition forms, TRRAN 1 and TRAN2.

Note: Only one revision of TRAN 1 is allowed. After the repair, no other changes are permitted.

Broad Aspects Of The Transition To GST

Transition aspects mainly relate to the following 

• You want to claim an old regime input tax credit under the new system (report in TRAN-1)

• Ensure that the materials sent to the workers are uninterrupted (report in TRAN-1)

• Report agent-principal dealing and dispatch of goods, works contracts (report in TRAN-1)

• tax claims and refunds under the previous system (not reportable in TRAN 1 or TRAN 2)

Things To Remember For Transition To GST

• Each GSTIN requires a separate fill-in of the transition form.

• Any credit you want to carry over from the previous system must also be a GST-eligible credit.

• Accumulated credits of the old regime can be taken to GST. This is allowed only when you have filled the past six months' returns under the old regime. So you must file old VAT/Excise/Service Tax returns properly. 

• Excise and service tax, as well as any other central taxes and charges, will be carried forward as CGST.

• State taxes, like VAT, will be carried over as SGST.

Information Required In TRAN 1  

Here is a breakdown of the information needed for TRAN 1 per item.

• GSTIN - Mention your GSTIN number

• Legal Name Of Registered Person - Mention your full legal name

• Trade Name - If you are using any trade name, mention that

• Verify that you have filed all returns due under current law for the last six months. The response takes the form Yes/No. Only if you filed returns for the previous six months can the closing balance of CENVAT/VAT credits from prior returns be taken as a credit in your GSTelctronic ledger.

• Tax credit carried forward in a return submitted in accordance with the law: You need to give information regarding every CENVAT credit you intend to convert to GST under this.

• The details to be provided are as under

1. Amount of CENVAT credit carried forward as central tax (Central Excise and Service Tax) under Sections 140(1) and 140(4) (a).

According to Section 140(1) of the CGST Act, this rule applies to any registered individual under the old regime and provided returns under that regime, except for a person paying tax under the composition scheme.

According to Section 140(4)(a) of the CGST Act, input credit refers to a taxable supply in which the registered person provides or manufactures both taxable and exempt services and items.

Such a person is eligible to make an excise and service tax input credit tax return balance claim. So this table must be filled if you are registered as a manufacturer or service provider and if you have a closing balance of CENVAT credit in your return for the period ending. 

You will have to provide the following details:

• Table Input 1: Serial No

• Table Input 2: Current registration number for the Central Excise and Service Tax Give your registration number for the central excise and service taxes (both are unique 15-digit numbers).

• Table Input 3:Tax period for which the most recent return submitted in accordance with the law applies - Give the time frame for your most recent return. For instance, if you manufacture excise, you must submit ER-1 and ER-3 quarterly and monthly, respectively. You describe both of these recently-filed returns in this section in detail.  

• Table Input 4: Date of filing of return specified in table input 3 - Provide the date of returns as mentioned above. 

• Table Input, 5:The amount of CENVAT credit you have carried forward for each return, is indicated by the balance CENVAT carried forward in the stated previous return.

• Table Input 6: According to transitional rules, CENVAT credit is allowed as a central tax ITC. Give the amount of the credit that appears on old return forms that you are qualified to use.

2. Tax credit for form C, Form F, and Form H/I which you want to carry forward (This information is to be provided for the period 1st April 2015 to 30th June 2017)

3. Tax credit or State/UT tax for pending C forms, F Forms, H/I forms (for all registrations on the same PAN and in the same state) - If you are registered under any state VAT and if you have any pending C Form/F Form/H or I Form then you are required to pay the differential tax payable will be deducted from the input tax credit balance available in the last return filed by you and the remaining credit will be carried forward under GST regime. 

6. Information on capital goods for which unclaimed credit has not been carried forward under the current law (Section 140(2) - This requires you to disclose details of any unclaimed input credit relating to capital goods). The credit of taxes paid on capital goods is usually spread over more than one financial year. Section 140(2) of the CGST act basically refers to carrying forward in a return of the old regime. 

1. You want to carry over the unclaimed CENVAT credit for capital goods, which is for CENVAT or excise or countervailing duty or special additional duty, to the electronic ledger as central tax, which is a component of the unclaimed input tax credit on capital goods (central taxes)

2. On capital goods, the state/UT tax part of the unused input tax credit is carried forward as state/UT tax in the computerised credit ledger (For all registrations on the same PAN and in the same state).

7. Details of input held in stock in terms of action 140 (3), 140(4)(b) and 140(6): This section is for claiming an input tax credit by a manufacturer or a dealer who was previously unregistered and/or was dealing in exempted goods. This section asks for details of input held as stocks. The majority of TRAN-1 pertains to a firm that is GST-registered, but

• Such business was not required to be registered under the old regime, or 

• Was manufacturing exempted goods or

• Providing exempted services or

• Who was providing works contract services and was availing abatement or

• A first-stage dealer or a second stage dealer or

• A registered importer

• A depot of manufacturer  

• Input Credit Claims other than those claimed in 5a:giving the HSN (at the six-digit level) below, together with the Unit Quantity Value and the Eligible Duties Paid on Such Inputs. Part 7a is where duty-paid invoices or other documents are available to be filled for input or for input contained in semi-finished and finished goods by a manufacturer or service provider to claim an input tax credit of excise duty or service tax as an input tax credit of CGST. 

Part 7b is to be filled only by manufacturers or service providers who were unregistered in the old regime - basically, to be filled by dealers or traders to provide information of inputs where duty-paid invoices or documents are unavailable. Such a person only has to fill TRAN2.

• VAT and entry tax paid on inputs or inputs services where documents of payment of tax are available and which will be carried forward as SGST/UTGST: Where input or input services are received on or after 1st July 2017, but the supplier under the old regime paid the duty or tax on the same. When the invoice has been entered into the books within 30 days of July 1st, a registered person may claim credit for applicable duties and taxes they have already paid. (The period can be extended by the commissioner of GST by another 30 days). This situation is covered under section 140(5) of the CGST act, and the following details must be submitted. 

• The name of the supplier must be mentioned in column 1

• The invoice number and the invoice date must be filled in columns 2 and 3, respectively.  

• In columns 4-7, the details of such supply, that is the description, the quantity (if goods), the unit of measurement (if goods), and the taxable value must be provided 

• In column 8 the eligible duties must be entered 

• In column 9 the VAT/Entry Tax in such goods must be entered

• In the last column, the date on which entry was made in the books of accounts of such transactions must be entered. 

3. Amount of VAT and entrance tax paid on inputs supported by invoices or other documentation attesting to tax payments that was submitted to an electronic credit ledger as SGST or UTGST in accordance with articles 140(3), 140(4)(b), and 140 (6).

• The details of the stock such as description, unit, the quantity of goods held, the value of the goods and the state tax (VAT or entry Tax) must be provided in columns 1-5.

• The total input tax credit previously claimed under the previous regime must be provided in column 6. 

• The input tax related to exempt sales (under the previous regime) that are now taxable under GST must be submitted in column 7. The old regime would not have claimed this input tax credit, and it is eligible now if such goods are taxable now or where a composition dealer in the old regime is now registering as a normal taxpayer.  

• The leftover balance will be eligible for input credit of SGST or UGST in column 8.

4. Stock of products not accompanied by invoices or other papers attesting tax payment (or just in places where VAT is applied at a single point): If you are a trader or dealer who was not registered under the previous regime and you do not have the invoice or other required documentation proving payment of the VAT/Entry tax that will be claimed as ITC of SGST after filling out form GST TRAN-2, you must fill out this area. Please be aware that this table cannot be filled by a manufacturer or a service provider. This also holds true for the state where VAT must be paid in one place. 

8. Details of transfer of CENVAT credit for registered persons having centralised registration under existing law [Section 140(8)]: This is applicable for the transfer of input tax credit  related to service tax

9. Specifics of the products delivered to the employee and kept in his possession on the employer's behalf under Section 141

1. Sent as principal: Principal who has sent goods to the job worker must fill-

• Provide the GSTIN of the job worker if he is registered under GST.

• In column 2, provide the unique no of a challan issued while transferring the goods to the job worker, and the challan date must be mentioned in column 3

• In column 4, give the types of goods - Whether it is input/semi-finished/finished goods

• In column 5-9 provide further details with the HSN codes of the good held with job worker, the description, the unit of measurement.

2. Held as Job Worker:If you are a job worker, you must disclose the specifics of the commodities you are holding on behalf of the principal in 9(b) -

• Provide the GSTIN of the principal if he is registered under GST.

• In column 2, provide the unique no of the challan issued while transferring the goods to the principal, and the challan date must be mentioned in column 3

• In column 4, give the type of the goods - Whether it is input/semi-finished/finished goods.

• In columns 5-9, provide further details on the HSN codes of the goods held with the job worker, the description, and the unit of measurement.

10. Detail of goods held in stock as an agent on behalf of the principal under section 142(14) of the SGST act. Section 142(14) says that if any good or capital goods belonging to the principal are lying on the premises of the agent on the appointed day, the agent can take credit for the tax paid on such goods or capital goods when he meets the following conditions:

• The agent is registered under GST

• Both the principal and the agent must declare the details of stock of goods or capital goods lying with such agents on 30th Jun 2017.

• The invoices for such goods or capital goods had been issued before 12 months prior or 1st July 2017.

• The principal has either reversed (if he claimed any input tax credit) or not availed of the input tax credit for such goods or capital goods. 

1. Details of goods held as an agent, if you are an agent, then you must give details of stock held by you on behalf of the principal, which is unsold as on 30th June 2017.

2. Goods sent as principal held by the agent; if you are a principal, then you must give the details of the stock sent to the agent and unsold as on 30th June 2017 in serial No 10(b)

11. Details of credit as per section 142(11) - This is for works contractors where he pays both VAT and service tax on any supply, then GST shall be leviable, and he shall be entitled to take credit of VAT and service tax paid by him to the extent of supplies made after 1st July.

12. Details of goods sent on an approval basis, six months prior to July 1st, 2017.