SERIES II No. 42

PUBLISHED BY AUTHORITY

RNI No. GOAENG/2002/6410

Reg. No. RNP/GOA/32/2021-2023

GOVERNMENT OF GOA

Department of Finance

Office of the Commissioner of Commercial Taxes

No. CCT/26-4/2022-23/F/3139

Subject: Clarification on refund related issues-

reg.

Ref.: Circular No. 181/13/2022-GST dated 10th

November, 2022 issued under Central Goods

and Services Tax Act, 2017 by the GST Policy

Wing, Central Board of Indirect Taxes and

Customs, Department of Revenue, Ministry of

Finance, GOI, New Delhi.

Circular

(No. 12/2022-23-GST)

Central Board of Indirect Taxes and Customs

(CBIC) has issued the above referred circular. For

the uniformity, it has been decided that the said

Circular issued by the CBIC is being made

applicable, mutatis mutandis, in implementation of

the Goa GST Act, 2017. Copy of the referred CBIC

Circular is attached herewith.

This Trade Circular is clarificatory in nature.

Difficulty, if any, in implementation of this Circular

may please be brought to the notice of the

undersigned.

Sarpreet Singh Gill, IAS, Commissioner of State

Taxes.

Panaji, 20th January, 2023.

Panaji, 20th January, 2023 (Pausa 30, 1944)

EXTRAORDINARY

Circular No. 181/13/2022-GST

F. No. CBIC-20021/4/2022

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

New Delhi, Dated the 10th November, 2022.

To,

The Principal Chief Commissioners/Chief

Commissioners/Principal Commissioners/Commissioners

of Central Tax (All).

The Principal Directors General/Directors

General (All).

Madam/Sir,

Subject: Clarification on refund related issues-reg.

Attention is invited to sub-section (3) of Section

54 of CGST Act, 2017, which provides for the refund

of unutilized input tax credit in cases where credit

is accumulated on account of rate of tax of inputs

being higher than the rate of tax on output supplies

i.e. on account of inverted duty structure. Sub-rule

(5) of Rule 89 of CGST Rules, 2017 prescribes the

formula for grant of refund in cases of inverted duty

structure. Vide Notification No. 14/2022-Central Tax

dated 05-07-2022, amendment has been made in

the formula prescribed under sub-rule (5) of Rule 89

of the CGST Rules, 2017. Further, vide Notification

No. 09/2022-Central Tax (Rate) dated 13-07-2022,

which has been made effective from 18-07-2022, the

restriction has been placed on refund of unutilised

input tax credit on account of inverted duty

structure in case of supply of certain goods falling

under chapter 15 and 27.

Suggestions are welcomed on e-mail: [email protected]

2749

OFFICIAL GAZETTE — GOVT. OF GOA

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2750

2. Representations have been received from the trade and the field formations seeking clarification on

various issues pertaining to the implementation of the above notifications. In order to clarify the issues

and to ensure uniformity in the implementation of the provisions of law across the field formations, the

Board, in exercise of its powers conferred by Section 168 (1) of the Central Goods and Services Tax Act,

2017 (hereinafter referred to as “CGST Act”), hereby clarifies the issues as under:

Sr.

Issue

Clarification

1. Whether the formula prescribed under sub-

rule (5) of Rule 89 of the CGST Rules, 2017 for

calculation of refund of unutilised input tax

credit on account of inverted duty structure,

as amended vide Notification No. 14/2022-

-Central Tax dated 05-07-2022, will apply only

to the refund applications filed on or after

05-07-2022, or whether the same will also apply

in respect of the refund applications filed before

05-07-2022 and pending with the proper officer

as on 05-07-2022?

Vide Notification No. 14/2022-Central Tax dated

05-07-2022, amendment has been made in sub-

-rule (5) of Rule 89 of CGST Rules, 2017, modifying

the formula prescribed therein. The said

amendment is not clarificatory in nature and is

applicable prospectively with effect from

05-07-2022. Accordingly, it is clarified that the

said amended formula under sub-rule (5) of Rule

89 of the CGST Rules, 2017 for calculation of

refund of input tax credit on account of inverted

duty structure would be applicable in respect of

refund applications filed on or after 05-07-2022.

The refund applications filed before 05-07-2022

will be dealt as per the formula as it existed

before the amendment made vide Notification No.

14/2022-Central Tax dated 05-07-2022.

2. Whether the restriction placed on refund of

unutilised input tax credit on account of

inverted duty structure in case of certain goods

falling under chapter 15 and 27 vide

Notification No. 09/2022-Central Tax (Rate)

dated 13-07-2022, which has been made

effective from 18-07-2022, would apply to the

refund applications pending as on 18-07-2022

also or whether the same will apply only to the

refund applications filed on or after 18-07-2022

or whether the same will be applicable only to

refunds pertaining to prospective tax periods?

Vide Notification No. 09/2022-Central Tax (Rate)

dated 13-07-2022, under the powers conferred by

Clause (ii) of the first proviso to sub-section (3) of

Section 54 of the CGST Act, 2017, certain goods

falling under chapter 15 and 27 have been

specified in respect of which no refund of

unutilised input tax credit shall be allowed,

where the credit has accumulated on account of

rate of tax on inputs being higher than the rate

of tax on the output supplies of such specified

goods (other than nil rated or fully exempt

supplies). The said notification has come into force

with effect from 18-07-2022.

The restriction imposed vide Notification No.

09/2022-Central Tax (Rate) dated 13-07-2022 on

refund of unutilised input tax credit on account

of inverted duty structure in case of specified

goods falling under Chapter 15 and 27 would

apply prospectively only. Accordingly, it is

clarified that the restriction imposed by the said

notification would be applicable in respect of all

refund applications filed on or after 18-07-2022,

and would not apply to the refund applications

filed before 18-07-2022.

3. It is requested that suitable trade notices may be issued to publicize the contents of this Circular.

4. Difficulty, if any, in implementation of this Circular may please be brought to the notice of the Board.

Hindi version would follow.

(Sanjay Mangal), Principal, Commissioner (GST).

OFFICIAL GAZETTE — GOVT. OF GOA

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2751

No. CCT/26-4/2022-23/F/3140

Subject: Guidelines for verifying the Transitional

Credit in light of the order of the Hon’ble

Supreme Court in the Union of India vs

Filco Trade Centre Pvt. Ltd., SLP(C) No.

32709-32710/2018, order dated 22-07-2022

& 02-09-2022-reg.

Ref.: Circular No. 182/14/2022-GST dated 10th

November, 2022 issued under Central Goods

and Services Tax Act, 2017 by the GST Policy

Wing, Central Board of Indirect Taxes and

Custom, Department of Revenue, Ministry of

Finance, (GOI), New Delhi.

Circular

(No. 13/2022-23-GST)

Central Board of Indirect Taxes and Customs

(CBIC) has issued the above referred circular. For

the uniformity, it has been decided that the said

Circular issued by the CBIC is being made

applicable, mutatis mutandis, in implementation of

the Goa GST Act, 2017, expect the Annexure-1

which pertains to verification CGST Credit and

below mentioned administrative instruction. Copy

of the referred CBIC Circular is attached herewith.

It is further decided that Deputy Commissioner

(GST) shall be the Nodal Officer for proper co-ordi-

nation between State and Central authorities for

verification of transitional credit claims. Also, it is

the responsibility of the Deputy Commissioner of

State Tax of concerned ward offices to regularly

monitor the progress made in this regard so that

the timelines mentioned in the Hon’ble Supreme

Court’s order dated 22-07-2022 and 02-09-2022 are

strictly adhered to by the field formations.

Difficulty, if any, in implementation of this Circular

may please be brought to the notice of the

undersigned.

Sarpreet Singh Gill, IAS, Commissioner of State

Taxes.

Panaji, 20th January, 2023.

————

Circular No. 182/14/2022-GST

F. No. CBIC-20021/04/2021-GST

Government of India

Ministry of Finance

Department of Revenue

Central Board of Indirect Taxes and Customs

GST Policy Wing

New Delhi, Dated the 10th of November, 2022.

To,

The Principal Chief Commissioners/Chief

Commissioners/Principal Commissioners/Commissioners

of Central Tax (All).

Madam/Sir,

Subject:

Guidelines for verifying the Transitional

Credit in light of the order of the Hon’ble

Supreme Court in the Union of India vs.

Filco Trade Centre Pvt. Ltd., SLP(C) No.

32709-32710/2018, order dated 22-07-2022

& 02-09-2022-reg.

Attention is invited to the directions issued by

the 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.

The operative portion of the judgment is as follows:

“1. Goods and Service Tax Network (GSTN) is

directed to open common portal for filing

concerned forms for availing Transitional Credit

through TRAN-1 and TRAN-2 for two months i.e.

w.e.f. 01-09-2022 to 31-10-2022.

2. Considering the judgments of the High Courts

on the then prevailing peculiar circumstances, any

aggrieved registered assessee is directed to file

the relevant form or revise the already filed form

irrespective of whether the taxpayer has filed writ

petition before the High Court or whether the

case of the taxpayer has been decided by

Information Technology Grievance Redressal

Committee (ITGRC).

3. GSTN has to ensure that there are no technical

glitch during the said time.

4. The concerned officers are given 90 days

thereafter to verify the veracity of the claim/

/transitional credit and pass appropriate orders

thereon on merits after granting appropriate

reasonable opportunity to the parties concerned.

5. Thereafter, the allowed Transitional credit is to

be reflected in the Electronic Credit Ledger.

6. If required GST Council may also issue

appropriate guidelines to the field formations in

scrutinizing the claims. The Special Leave

Petitions are disposed of accordingly. Pending

applications, if any, also stand disposed of.”

1.2.

Subsequently in Miscellaneous Application

No. 1545-1546/2022 in SLP(C) No. 32709-32710/2018,

Hon’ble Supreme Court vide order dated 2nd

September, 2022 has inter-alia ordered as follows:

“The time for opening the GST Common Portal

is extended for a further period of four weeks

from today.

It is clarified that all questions of law decided

by the respective High Courts concerning

Section 140 of the Central Goods and Service

Tax Act, 2017 read with the corresponding Rule/

/Notification or direction are kept open.”

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2. As is clear from the above, the Hon’ble Court

has directed that the common portal be opened for

filing prescribed forms for availing Transitional

Credit through TRAN-1 and TRAN-2 for two months

from 01-10-2022 to 30-11-2022 for the aggrieved

registered assessee (henceforth, referred as

‘applicant’). The Transitional Credit claimed by the

applicant shall be credited in his electronic credit

ledger to the extent allowed by the jurisdictional

tax officer through an order after carrying out

necessary verifications. As per the Hon’ble Court’s

order, the said verification has to be carried out

within 90 days after completion of the above

window of two months, i.e. within 90 days from

01-12-2022 i.e. upto 28-02-2023.

2.1 It is to be noted that while allowing the

applicant to file/revise TRAN-1/TRAN-2 during

this window of 2 months, Hon’ble Supreme Court

has kept all questions of law open.

2.2 It may be mentioned that Hon’ble Supreme

Court has only allowed filing of TRAN 1/TRAN-

2 or revising the TRAN-1/TRAN-2 already filed

by the applicant and has not allowed the

applicant to file revised returns under the

existing laws.

3. Reference is also invited to the Board’s Circular

No. 180/12/2022 dated 09-09-2022 vide which

guidelines have been issued for the applicants for

filing new TRAN-1/TRAN-2 or revising the already

filed TRAN-1/TRAN-2 on the common portal.

4. To ensure uniformity in the implementation of

the directions of the Hon’ble Supreme Court across

field formations, the Board, in exercise of its powers

conferred by Section 168 (1) of the Central Goods

and Services Tax Act, 2017 (hereinafter referred to

as “CGST Act”), hereby issues the following

guidelines for verifying the Transitional Credit.

5. Verification of the Transitional Credit:

5.1 The jurisdictional tax officers can access

the TRAN-1/TRAN-2 filed/revised by the

applicant on their back office systems (which is

the CBIC-AIO portal for the Central Tax Officers,

the respective State portal for MODEL-1 States

and BO portal for MODEL 2 States). Further, a

self-certified downloaded copy of TRAN-1/TRAN-2

filed/revised by the applicant shall also be made

available to the jurisdictional tax officer by the

said applicant as mentioned in Para 4.5 of Circular

180/12/2022 dated 09-09-2022.

5.2 The verification of the transitional credit

shall be conducted by the jurisdictional tax

officer who will pass an appropriate order

regarding the veracity of the claim filed by the

applicant, based on all the facts and the provisions

of the law. In respect of TRAN-1/TRAN-2 filed/revised

by the applicant under the administrative control

of the central tax authorities, such verification

and issuance of order shall be done by the

jurisdictional officer of central tax, whereas in

respect of TRAN-1/TRAN-2 filed/revised by the

applicant under the administrative control of the

State tax authorities, the same shall be done by

the Jurisdictional Officer of State Tax. The

jurisdictional tax officer shall start the

verification process immediately on availability

of TRAN-1/TRAN-2 filed/revised by the applicant

on the back office system or on receipt of self-

certified downloaded copy of the same from the

applicant, whichever is earlier. It is needless to

mention that principles of natural justice shall

be followed in the process of passing the order

relating to allowance or disallowance of the

Transitional Credit.

5.3 The jurisdictional tax officer shall, on the

basis of declaration made by the applicant in the

format specified in Annexure A to Circular No. 180/

/12/2022 dated 09-09-2022, and on the basis of

data available on the back office system, shall

check whether the applicant had earlier filed

TRAN-1/ TRAN-2 or not. In cases where TRAN-1/

/TRAN-2 had already been filed by the applicant

earlier, the tax officer shall check whether there is

any change from the earlier filed TRAN-1/TRAN-2

or not. In case, there is no change from the earlier

filed TRAN-1/TRAN-2, then such claim of

transitional credit is liable for rejection by the tax

officer, through a reasoned order, after providing

due reasonable opportunity to the applicant.

5.3.1 In other cases, the jurisdictional tax officer

shall proceed for verification of claim of transitional

credit made by the applicant in FORM TRAN-1/

/TRAN-2. In this regard, in respect of transitional

credit pertaining to central tax, he may refer to

the guidelines detailed in Annexure I to this

circular. In respect of verification of transitional

credit pertaining to the State Tax/Union territory

Tax, the tax officer may refer to the guidelines

issued by the relevant State/UT, if any.

5.3.2 There may be cases where the transitional

credit claim filed/revised by the applicant may

have components of both central tax and State/

/UT tax. In such cases, where the applicant is

under the jurisdiction of central tax officer and

where the transitional credit claimed has

component of State/Union Territory tax also, the

jurisdictional central tax officer shall refer the said

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claim for verification of component of State/UT tax

to his counterpart State/UT tax officer. For this

purpose, he shall share the list of GSTINs/ARNs

with the counterpart officer, in respect of which

verification report is needed from him, on a weekly

basis, along with an intimation of the same to the

nodal officer of central tax as well as State/UT tax

referred in Para 6.1 below through his official email

ID or physically. Similar action, as above, shall also

be taken by the jurisdictional State/UT tax officers

in cases where the applicant is under the

jurisdiction of State/UT tax officer and where the

transitional credit claimed has component of

central tax also.

5.3.3 The jurisdictional tax officer shall, in

parallel, continue the verification of the remaining

portion of the transitional credit at his end.

5.3.4 The jurisdictional tax officer and the

counterpart tax officer shall verify the transitional

credit claimed under the CGST or the SGST head,

as the case may be, by referring to the guidelines

detailed in Annexure I to this circular for

transitional credit pertaining to central tax and

the guidelines issued by the relevant State/UT for

verification of transitional credit pertaining to the

State Tax/Union territory Tax, as applicable. While

conducting the verification, the officer must also

check whether any adjudication or appeal

proceedings in TRAN-1/TRAN-2 related matter

are pending/concluded against the applicant. In

such cases, where any adjudication or appellate

proceedings have been initiated against the

applicant in respect of TRAN-1/TRAN-2, the officer

should take a note of the relevant facts in the

notice/order, and the grounds/reasons for

inadmissibility of transitional credit, if any, in the

said notice/order.

5.3.5 In respect of verification done by the

counterpart officer, after verification, he will

prepare a verification report, in the format

detailed in Annexure-II of this circular, specifying

the amount of transitional credit which may be

allowed to be credited to the electronic credit

ledger of the applicant and the amount which is

liable for rejection, along with detailed reasons/

/grounds on which the said amount is liable to

be rejected. Such duly signed verification report

shall be sent by the counterpart officer to the

jurisdictional tax officer at the earliest, though

generally not later than ten days from the date

of receipt of the request from the jurisdictional

officer. In case, where the adjudication or appeal

proceedings in respect of TRAN-1/TRAN-2

related matter are pending/concluded against

the applicant, the counterpart officer shall

categorically bring out the relevant facts in his/

her verification report alongwith his detailed

findings, admissibility/inadmissibility, reasons of

inadmissibility thereof and the copy of the

relevant notice and/or orders.

5.3.6 For the purpose of verification of the claim

of the transitional credit, the jurisdictional tax

officer as well as the counterpart tax officer, if

required, may call for relevant records including

requisite documents/returns/invoices, as the case

may be, from the applicant.

5.3.7 After receiving the verification report

from the counterpart officer, the jurisdictional

tax officer shall decide upon the admissibility of

the credit claimed by the applicant. In case the

jurisdictional tax officer finds that the transitional

credit claimed by the applicant is partly or wholly

inadmissible as per the provisions of the Act and

the rules thereof, then a notice shall be issued

by the jurisdictional tax officer to the applicant

preferably within a period of seven days from

the receipt of report from the counterpart officer,

seeking explanation of the applicant as to why

the said credit claimed by him should not be

denied wholly/partly, as the case may be. The

applicant shall also be provided an opportunity

of personal hearing by the jurisdictional tax

officer in such cases. If required, the jurisdictional

tax officer may seek comments of the counterpart

officer on the submissions made by the applicant

in so far as the said submission relates to the tax

(central or State) being administered by such

counterpart officer.

5.3.8 After considering the facts of the case,

including verification report received from the

counterpart officer, submissions made by the

applicant and the comments, if any, of the

counterpart officer on the same, the jurisdictional

tax officer shall proceed to pass a reasoned order,

preferably within a period of fifteen days from

the date of personal hearing, specifying the

amount of transitional credit allowed to be

transferred to the electronic credit ledger of the

applicant and upload a pdf copy of the said order,

on the common portal for crediting the amount

of allowed transitional credit to the electronic

credit ledger of the applicant. In any case, such

order shall be passed within a period of 90 days

from 01-12-2022 i.e. upto 28-02-2023.

5.3.9 Where the amount credited to the

electronic credit ledger pursuant to the originally

filed TRAN-1/TRAN-2 exceeds the amount of

credit admissible in terms of the revised TRAN-1/

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/TRAN-2 filed by the applicant, such excess

credit is liable to be demanded and recovered

from the applicant, along with interest and

penalty, in accordance with the provisions of

Chapter XV of the Act and the rules made

thereunder.

5.3.10 GSTN will also issue a separate advisory

for entering the details on the portal by the tax

officers.

5.3.11 It may be noted that consequent to

reorganization of the State of Jammu & Kashmir

and merger of the Union territories of Dadra and

Nagar Haveli & Daman and Diu, the taxpayers of

UT of Ladakh and the earlier UT of Daman and

Diu have been allotted new GSTINs. Accordingly,

the taxpayers of Ladakh and Daman and Diu can

file/revise TRAN-1/TRAN-2 only through their

newly allotted GSTINs. It is, therefore, advised

that the concerned jurisdictional tax officers

should take into consideration transitional credit,

if any, claimed by such taxpayers under their

previous GSTINs.

6. Modalities of co-ordination between central

tax authorities and state tax authorities.

6.1 It is to be noted that all the Zonal Principal

Chief Commissioner/Chief Commissioners (PCCs/

/CCs) of Central Tax and Chief Commissioners/

/Commissioners of Commercial Taxes (CCCTs/

/CCTs) of various States/UTs shall appoint nodal

officer(s) in their respective formations

immediately for proper co-ordination between

central and State/UT authorities for verification

of transitional credit claims and shall make

available the details of the said nodal officers,

along with their phone numbers and email IDs,

to the counterpart tax authority. The nodal

officers shall ensure that the verification reports/

/comments sought by the jurisdictional tax

officers are being sent in a timely manner by the

counterpart officers in their formations.

6.2 It is the responsibility of the Zonal Principal

Chief Commissioner/Chief Commissioners (PCCs/

/CCs) of Central Tax and Chief Commissioners/

/Commissioners of Commercial Taxes (CCCTs/

/CCTs) of various States/UTs to regularly monitor

the progress made in this regard so that the

timelines mentioned in the Hon’ble Supreme

Court’s order dated 22-07-2022 and 02-09-2022

are strictly adhered to by the field formations.

7. Where any communication is required to be

made by the central tax officer with the applicant

for the purpose of verification of TRAN-1/TRAN-2,

through a mode other than through the portal, the

same should be made with the use of DIN, as per

the guidelines mentioned in the CBIC Circular No.

122/41/2019-GST dated 5th November, 2019.

8. Difficulties, if any, in implementation of these

instructions may be informed to the Board (gst-

[email protected]). Hindi version shall follow.

(Sanjay Mangal), Principal Commissioner (GST).

————

ANNEXURE-I

Guidance Note for Verification of CGST Transitional Credit claimed by the Applicant in TRAN-1/

/TRAN-2

1. Description of entries in TRAN-1 Table:

In the Form TRAN 1 there are only six entries which decide all the CGST credit which is posted in the

electronic credit ledger. These entries are briefly described below. It is advised that the full text of law

be referred for better understanding of the issue.

Sr.

Table No.

Provision in

Indicative list

No.

in TRAN-I

CGST Act

nature of Credit

Col. 6 in table 5(a)

140(1),

140(4)(a)

and140(9)

This table captures detail of the CENVAT credit carried

forward in the return (ER-1/2/3 or ST-3) relating to the period

ending with 30-06-2017, subject to conditions specified

in Section 140(1) of CGST Act, by the manufacturers/

/service providers.

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Table 7(a)

140(3)

140(4)(b)

140(6)

and 140(7)

This table pertains to credit claim by new tax

payers or tax payers who were either not registered

or were not part of CENVAT Credit chain earlier.

Here, Credit can be claimed in TRAN-1 in respect

of inputs held in stock and inputs contained in

semi-finished or finished goods held in stock on

the

appointed

day

based

invoice/

/document evidencing payment of duty (including

CTD), subject to fulfillment of other conditions

specified in Section 140(3), 140(4)(b), 140(6) and 140(7)

as the case maybe.

Column (6)

in Entry 7B

in Table 7(a)

Column (6)

in Entry 7A

in Table 7(a)

Provisio

Section 140(3)

and Rule 117(4)

of CGST Rules

This table pertains to credit claim by new tax payers

(e.g. traders) who were not manufacturers or service

providers. Deemed credit @ 60% of Central Tax

applicable where CGST is 9% or more, and 40%

where CGST is less than 9% can be availed. The

provision applies where the assessee is not in

possession of an invoice or any other documents

evidencing payment of duty in respect of inputs

only. [In this case the Electronic Credit Ledger

gets populated through TRAN-2 and not through

TRAN 1].

Column (8) in Table

7(b)

140(5), 140(7)

This table captures transitional credit taken on such

inputs or input services which were received after

1st of July, 2017 but taxes on which were paid

under the existing law (Goods/Services in Transit).

It does not apply to capital goods. This table also

captures credit distributed by the Input Service

Distributor.

Column 9 in Table 8

140(8)

This table pertains to Centrally Registered unit,

the CENVAT credit carried forward in their last

return is captured in Table 5(a) and a part or full

of such credit can be distributed through Table 8.

The credit distributed through column 9 gets

credited in the electronic credit ledger of the

receivers and a corresponding debit entry in made

in the ledger of the Centrally registered unit.

Column (7) in Table

Section 142(11) (c)

read with Rule

118 of CGST Rules

Transition of credit in respect of supplies which

attracted both VAT and Service Tax in pre-GST era

and where VAT and Service Tax both were paid,

Column 11 of Table

6(a)

This table captures details of un-availed credit of

capital goods in the pre-GST era. Capital Goods

credit was allowed to be availed in two installments

of 50% each. This table is meant to be used by the

tax payers who have availed a portion of CENVAT

credit on capital goods through ER or ST return and

now intend to avail remaining credit in respect of

capital goods which has not been availed through

the ER or ST return. The said amount of credit

should have been admissible as input tax credit

under GST law as well as under existing law.

140(2)

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before 1st July, 2017, on any supply but the supply

is made after 1st July, 2017. The taxable person is

entitled to take as CGST credit, the service tax paid

under the existing law to the extent of supplies

made after 1st July, 2017 as he would be liable to

pay CGST in respect of such supplies. (VAT credit

cannot be taken as Service tax credit and vice versa).

2. Checks for verification of entries in TRAN-1

Table:

As a matter of assistance, following checks are

suggested in relation to the entries provided in

various tables of TRAN 1. The list of checks is not

exhaustive but is indicative only based on

provisions of law, the likely error and the inputs

received from the field formations.

Checks for Table 5(a):

3.1.1 Check 1: Verify that the credit has been

taken against closing balance of CENVAT credit in

ER-1/2/3 or ST-3. Credit can be taken only where

the last return was filed and credit taken in Table

5(a) should not be more than closing balance of

credit in ER-1/2/3 or ST-3 minus the education/

/secondary education cess/KKC/SBC.

3.1.2 Check 2: Credit of taxes not covered in

the definition of eligible duties in Section 140

cannot be availed. Example: Krishi Kalyan Cess,

Education Cess, clean energy cess etc. Credit of

VAT and PLA balance is not allowed as transitional

credit.

3.1.1 Check 3: Check that returns have been

filed for last 6 months. An assessee filing TRAN-1

and taking credit in table 5(a) should have–

a) Filed ER-1 or ER-2 regularly between Jan.,

2017 and June, 2017 or

b) Filed ER-3 for period ending March, 2017

and June, 2017 or

c) Filed ST-3 for period ending March, 2017

and June, 2017.

This check should be performed liberally where

many units have merged into one registration or a

single unit has been split into many (Centralized

registration cases/LUT units) in GST. Compliance

by any of the merging unit which was filing the

returns in the pre-GST would entitle the new unit

to avail credit in relation to that merging unit.

Checks for Table 6(a):

4.1 Check 4: Check that in table 6 only credit

on capital goods not availed in any return is taken.

If second installment of any capital goods credit is

taken through return in table 5(a) and again the

details are filled in table 6, it would lead to double

credit getting taken. For example, the second

installment of capital goods credit where first

installment credit was availed in 2016-17 and second

installment can be availed in the financial year 2017-

-18, provided the second installment was not availed

in any of the returns filed in the first quarter of

2017-18 under Central Excise or Service Tax. If no

credit was availed earlier, credit of entire amount

cannot be availed through this Table. In respect of

invoices involving large credit, due verification as

deemed fit may be done.

Checks for Table 7(a), Entry 7A:

5.1 Check 5: In cases where the credit is being

shown by an assessee who was registered in Central

Excise or Service on account of inputs relating to

exempted goods, carefully check whether the

assessee has followed the provisions of Rule 6 of

CENVAT Credit Rules in the period prior to GST.

Case I: Only exempted goods/services were

being manufactured or provided: Rule 6(2) of

CENVAT Credit Rules did not allow any credit in

the CENVAT register if only exempted goods were

being manufactured. No credit can flow from return

in relation to inputs in such cases. The entry in

table 5(a) therefore should be NIL. The

apportionment of credit on inputs and complete

reversal thereof under Rule 6 of CENVAT Credit Rules

took place at the time of removal of goods. Therefore,

in such cases only credit of inputs and inputs

contained in semi-finished which existed in stock

on the day of the transition and for which conditions

prescribed in cl. (i) to (v) of Section 140(3) are satisfied

would be available. Where the stock shown is very

high, verification using VAT return or any other

collateral document where stocks are declared can

be done.

CaseII: Exempted and non-exempted goods/

/services were being manufactured or provided: Rule 6(3)

of the CENVAT Credit Rules provided the procedure

for apportionment of credit relating to taxable

goods/services and reversal of credit relating to

exempted goods/services. Credit in table 5(a) would

flow from the return in such cases. It should be

checked that the return reflects credit after

application of Rule 6(3) of CENVAT Credit Rules. The

reversal in terms of Rule 6(3) was required to be

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2757

done at the time of removal of finished goods.

Therefore some credit in Table 7A can arise for

such inputs which were in stock and which not

attributed till the date of the transition to either

exempted goods or non-exempted goods. To avail

credit on such inputs, other conditions prescribed

in Cl. (i) to (v) of Section 140(3) are required to be

satisfied. Where the stock shown is very high,

verification using VAT return or any other collateral

document, where stocks were declared, can be done.

5.2: Check 6: In cases where a new tax payer

has availed credit using Credit Transfer Document,

check that CTD issued by the manufacturer exists

and CTD has been issued in terms of Rule 15(2) of

CCR, 2017 read with Notification No. 21/2017-

-CE(NT) dated 30-06-2017 (Capital Goods having

value more than Rs. 25,000, goods to be identifiable

by a distinct number etc.) e.g.: Dealers of new car.

Checks for Table 7(a), Entry 7B:

6.1 Check 7: Check that credits on stock declared

on which credit can be claimed in terms of Rule

117(4) of the CGST Rules, 2017 are reasonable.

Where the stock declared in very high, stock

declared in VAT return or any other collateral

document, where stocks were declared, may be

cross-checked. It may be noted that credit of this

stock would be available on sale being made and

TRAN 2 return being filed. It is reiterated that

electronic credit ledger would get populated

through TRAN-2 and not through TRAN-1.

6.2 Check 8: Check that the assessee has not

declared this stock in any other table or has not

availed this credit from any other table, say table

5(a). Where the person availing credit through

TRAN 2, for which stock is declared in this table,

is a trader, no credit can exist in any other table

which pertains to credit to tax payers who were

registered earlier [e.g. Table 5(a)].

Checks for Table 7(b):

8.1 Check 9: Check that the duty paying

document exist and take confirmation from the tax

payer that the duty or the tax paying document

were recorded in the books of account of such

person as per the conditions prescribed in law.

Where goods under movement are shown in

exorbitant quantity, transport verification may be

considered. It should also be checked that the

conditions for availing ISD credit as prescribed in

law are satisfied.

Checks for Table 8:

9.1 Check 10: Centralized registered units have

distributed their credit through table 8. The units

receiving the credit were not required to file TRAN

1 to receive this credit. The receiving units have

got credit on the basis of credit distributed by the

centrally registered unit. Check that receiving units

have not filed TRAN 1 to avail this credit as this

would lead to double credit to receiving unit. Also

take confirmation from the centrally registered unit

that resultant credit in the ledger of the distributing

centrally registered unit was reduced by the

amount of credit distributed through Table 8.

10.

Check for Table 11:

10.1 Check 11: Check that the service tax

claimed as credit was indeed paid under the

existing law and supplies were indeed made after

1st July, 2017. Credit of VAT cannot be taken as

CGST credit and vice-versa.

11.

General check:

11.1 Check 12: Check that credit which is being

claimed through TRAN 1/TRAN-2 is not taken

through return in FORM GSTR-3B. This can lead to

double credit being taken.

11.2 Clarifications issued vide Circular No. 33/

/07/2018-GST dated 23-02-2018 regarding disputed

credit and blocked credit may be followed during

the verification process of the transitional credit.

————

ANNEXURE-II

Verification Report for TRAN-1/TRAN-2 to be

submitted by the counterpart Officer to the

Jurisdictional Tax Officer

1. Basic information:

(a) Name:

(b) GSTIN:

(d) Whether transition

credit claimed earlier

Yes/No

2. (a) Whether SCN/Adjudication order issued in

respect of credit availed through TRAN-1/TRAN-2

filed earlier; if “Yes”, provide reference number and

date:

(b) If answer to (a) above is “Yes”, then amount of

transitional credit disallowed/proposed to be

disallowed out of total claim filed by the applicant

earlier:

OFFICIAL GAZETTE — GOVT. OF GOA

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*Table of

#Amount of

@Grounds on

$ Whether

TRAN-

credit disallowed/

which credit

recovered

1/TRAN-2

/proposed to be

is disallowed/

disallowed

/proposed to be

disallowed

(a)

(b)

(c)

Notes:

Add additional rows if required.

*Specify the serial number of the Table (of earlier filed TRAN-1/TRAN-2), the credit in respect of which has

either been disallowed through an order or is proposed to be disallowed through an SCN.

#Specify the amount which has been disallowed/proposed to be disallowed.

@Specify the grounds for disallowance of the said credit.

$Specify whether amount has been recovered, either in cash or debit to credit ledger.

Attach copies of the relevant notice/adjudication order.

3. (a) Whether appeal has been filed against the adjudication order, if any, specified in serial number 2

above; if “Yes”, provide appeal number and date of filing appeal.

(b) If appeal has been disposed of, then provide order number and date.

*Table of

Finding of Appellate

$ Whether recovered

TRAN-

Authority

1/TRAN-2

(a)

(b)

(c)

Notes:

Add additional rows if required.

*Specify the serial number of the Table (as mentioned in Table at serial number 2 above) and the amount of tax

the claim in respect of which has been adjudicated and the appeal has been decided.

$Specify whether amount has been recovered, either in cash or debit to credit ledger.

Attach copies of the order of the appellate authority.

4. Amount of credit claimed afresh/revised (as per TRAN-1/TRAN-2 filed/revised during the present window

of two months) by the applicant, the amount admissible, the amount in admissible, if any, along with the

grounds/reasons for non-admissibility thereof:

Table

Amount claimed

Amount

Grounds of

in newly filed/

admissible

inadmissible, if

inadmissability,

/revised TRAN-1/

any

along with the

/TRAN-2

relevant provisions

of law/rules

CGST

SGST/

CGST

SGST/

CGST SGST/

/UTGST

(a)

5(a) of TRAN-1

(b)

5(c) of TRAN-1

(c)

6(a) of TRAN-1

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(d)

6(b) of TRAN-1

(e)

7(a) (7A)

of TRAN-1

(f)

7(a)(7B)

of TRAN-1

(g)

7(b) of TRAN-1

(h)

7(c) of TRAN-1

(i)

8 of TRAN-1

(j)

10(a) of TRAN-1

(k)

10(b) of TRAN-1

(l)

11 of TRAN-1

(m)

Aggregate of

Table 4 of TRAN-2

(n)

Aggregate of

Table 5 of TRAN-2

5. Other relevant information, if any (please give details).

Place:

Signature of the Counterpart Officer

Date:

(Name & Designation of the Counterpart Officer)

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