Transition of The Old Input Credits under VAT to GST – Tran 2


    Form Tran 2 can be filed by a dealer/trader registered under GST but not under the old regime. A dealer who doesn’t have VAT or excise invoices for stocks they hold can use TRAN 2 to claim credit tax. A manufacturer or service provider cannot submit Form GST TRAN 2. When a supply is sold, it must be reported by a dealer or trader at the end of each month to claim an input tax credit. They need to fulfil the following requirements:

    Details To Be Filled In TRAN-2

    Stock held without a supporting document attesting to the payment of excise duty (central tax); if you do not have a document certifying the cost of excise duty, you must fill out the following information:

    Unavailed ITC w.r.t. Capital Goods

    During the acquisition of capital goods under the pre-GST regime, taxpayers were not entirely eligible for ITC. The remaining ITC could be claimed under GST if a registered person who acquired the capital goods could not claim the total amount of tax paid on the acquisition. Provide the following information for each capital good, broken down by invoice:

    Stock Held Being Sent Or Received For Job Work  

    When a principal manufacturer sends his products to a job worker for job work and those products are with the job worker as of July 1, it counts as a stock the principal manufacturer owns for which tax credit will be given. The principal manufacturer and the job worker for goods must fill in the following details:

    The following is the essential information to include in the form:

    Goods Sent To Agent or Consignment Dealer For Sale 

    When a principal dealer or manufacturer sends his merchandise to an agency or consignment dealer for sale, ownership of the products remains with the principal dealer or manufacturer.

    The following is the essential information to include in the form:

    Conditions To Claim ITC 

    To fill out the TRAN form, the individual must abide by a few conditions. They are as follows:

    Percentage of ITC Claims Available

    The registered person under GST will receive a credit for the tax paid on acquiring goods and kept in closing stock as of the specified date. Since it does not own an invoice or other documents evidencing payment of taxes under VAT, Central Excise, a credit will be allowed based on the IGST, CGST, and SGST of the closing stock under GST according to HSN codes. When the goods kept as closing stock are sold by the taxpayer. He will first have to pay appropriate taxes on such outward supply, and then he will be allowed the Input Tax Credit based on the tax rate paid for that outward supply. A registered person may claim ITC credit in the manner described above for the tax period starting on the designated date. By the conclusion of the tax period, a TRAN 2 detailing the supply details must be filed for each period.

    Condition To Be Fulfilled To Claim Credit Of Central And State Tax


    The TRAN 2 format and due date are important aspects of the transition of old input credit to the Goods and Services Tax (GST) regime in India. The TRAN 2 form enables taxpayers to claim the input tax credits for taxes paid under the old tax regime that was not claimed in the earlier TRAN 1 form.

    It is crucial for taxpayers to adhere to the due date for filing the TRAN 2 form to avoid any penalties or legal issues. By understanding the requirements and deadlines for the TRAN 2 form, taxpayers can ensure a smooth transition to the GST system and take advantage of the input tax credit available to them.

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