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2020 ] “TRAN-1” CREDIT AVAILMENT UNDER GST AND ITS DEVELOPMENTS J53

“TRAN-1” CREDIT AVAILMENT UNDER
GST AND ITS DEVELOPMENTS
By
R. Prakash
GANPAT RAM & ASSOCIATES

The Goods and Services Tax (GST) Law was in-
troduced on 1-7-2017 with many new concepts. All the
main processes like registration, uploading of invoices,
matching of invoices, returns was made online processes
to be submitted on common portal. At the outset a tax-
payer, could transition unutilized input tax credits under the erstwhile laws say,
Central Excise, Service Tax and State VAT laws into GST by filing Form GST
TRAN-1, by following procedures prescribed therein.
Transitional provisions to enable the transition were provided in the
CGST Act.
Section 140 of the Central Goods and Services Tax Act, 2017 entitles the
assessee to claim the benefit of Transitional credit by making the claim in the
prescribed manner and empowers the Government to prescribe the procedure in
this regard. The extract is under.
“Section 140(1) A registered person, other than a person opting to pay tax
under section 10, shall be entitled to take, in his electronic credit ledger, the
amount of CENVAT credit carried forward in the return relating to the peri-
od ending with the day immediately preceding the appointed day, furnished
by him under the existing law [within such time and] in such manner as may
be prescribed :”
Accordingly, Rule 117 of the CGST Rules, 2017 prescribed the filing of TRAN-1 to
carry the credit balance of earlier tax regime to GST within 90 days of the appoint-
ed day.
Taxpayers were facing problem in making the compliances because of
system glitches of GSTN. This time period was extended from time to time by the
GST Authorities.
System glitches were evident and even admitted by the Government. Fi-
nally, it was the system glitches which led to the introduction of Rule 117(1A)
which is reproduced hereunder :
“117. Tax or duty credit carried forward under any existing law or
on goods held in stock on the appointed day. -
(1A) Notwithstanding anything contained in sub-rule (1), the Com-
missioner may, on the recommendations of the Council, extend the date for
submitting the declaration electronically in FORM GST TRAN-1 by a fur-
ther period not beyond 31st March, 2020, in respect of registered persons
who could not submit the said declaration by the due date on account of
technical difficulties on the common portal and in respect of whom the
Council has made a recommendation for such extension.”

GST LAW TIMES  20th August 2020  21