Claim the unclaimed transition credit! One time opportunity.

Hon’ble Supreme Court vide order dated 22.07.2022 in the matter of Union of India vs. Filco Trade Centre Pvt. Ltd., SLP(C) No. 32709-32710/2018 has directed GSTN to open common portal for filing TRAN-1 and TRAN-2 for two months for any aggrieved taxpayer whether or not such a person has filed writ petition or not. The portal is directed to be open 01.09.2022 to 31.10.2022 which upon request in Miscellaneous Application No.1545-1546/2022 in SLP(C) No. 32709-32710/2018 has been allowed to be extended for 1 month vide order dated 2nd September, 2022 and hence will be open w.e.f. 01.10.2022 to 30.11.2022, as it has been categorically stated that in the original order that GSTN has to ensure that there are no technical glitch during the said time.

Unlike at the advent of GST, where transitional credit use to reflect immediately in electronic credit ledger upon filing of Form GST TRAN-1/TRAN-2, here, it would be reflected only on the basis of the transition credit allowed in the order passed by the jurisdiction proper officer upon due verification in time bound manner i.e., within 90 days.

While disposing off the SLP, Hon’ble Supreme Court has stated that if required GST Council may also issue appropriate guidelines to the field formations in scrutinizing the claims, accordingly, in order to ensure smooth transition, CBIC vide Circular No. 180/12/2022-GST dated 9-9-2022 has issued detailed guidelines which highlights the following aspects:

· That the applicant may file TRAN-1/TRAN-2 online on common portal;

· That the facility of downloading the TRAN-1/TRAN-2 filed earlier will be made available in order to assist in filing the revised TRAN-1/TRAN-2;

· That a declaration in Annexure-A about filing of returns of pre-GST regime tax periods, possession of documents/information for claiming credits, non-availment of credit through Form GSTR 3B, no claim of refund of such credits in the pre-GST regime tax returns, etc. Further, details of any notice or order issued u/s 73/74 of CGST Act, 2017 and if credits have been determined to be in-eligible, details of any appeal/petition, etc. needs to be furnished. Such an exhaustive self-declaration in itself shall ensure self-audit by the taxpayers and in case any of such declarations proves to be wrong may lead to denial of such credits even after the order allowing transitional credit is passed by the jurisdiction Proper Officer i.e., even after 90 days.

· That the guidelines clearly ensures that taxpayers who is claiming transitional credit under this special dispensation has not taken the said credit through Form GSTR 3B and if such credit has been taken through GSTR 3B whether the same has been reversed or not through along-with applicable interest. Though the Circular talks about the reversal along-with interest where credits have been taken in GSTR 3B, however, it appears that in cases prior to the decision of the Hon’ble Supreme Court where various High Courts have allowed taxpayers to claim transitional credit through Form GSTR 3B and where such credits have been availed through GSTR 3B based on such order should not be a subject matter of dispute. It seems that reversal along-with interest should ideally be in cases where taxpayers have suo-moto decided to avail such credits through GSTR 3B;

· That the applicant claiming in credit in Table 7A of GST TRAN-1 on the basis of Credit Transfer Document (CTD) shall also upload the copy of TRANS-3;

· That no claim of transitional credit shall be filed in Table 5(b) & 5(c) of GST TRAN-1 in respect of C/F/H/I Forms which have been issued after the due date for submission of GST TRAN-1 i.e., after 27-12-2017;

· That instead of filing tax-period claim in GST TRAN-2, taxpayer is supposed to file claim in one consolidated GST TRAN-2;

· That a self-certified copy of TRAN-1/TRAN-2, declaration in Annexure A and TRANS-3 (wherever applicable) is to be submitted to the jurisdictional proper officer within 7 days of filing of declaration;

· That it is a one-time opportunity and no further opportunity shall be given to file or revise TRAN-1/TRAN-2, either during the said period of 2 months or subsequently;

· That taxpayers who have 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;

· That where the transitional credits claimed earlier is a subject matter of adjudication need to prefer an appeal or pursue alternative remedies available in the law and filing of fresh declaration in TRAN-1/TRAN-2 under this Circular is not appropriate;

cir-180-08-2022-cgst.pdf

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Hope it adheres in availing the unclaimed transitional credit!