What is Form GST TRAN-1 and when to File it
Businesses having carry over Cenvat credit and Input VAT credit are allowed to carry forward the eligible Cenvat/Input Credit (ITC) from earlier regime to GST. The Cenvat credit including Service Tax will be carried forward as CGST Input Tax credit and VAT including entry tax will be available as SGST Input tax credit. And, also in certain businesses circumstances, input tax credit on closing stock held on 30th June, 2017, will be allowed to carry forward to GST regime.
However, to be eligible to carry forward the credit, businesses are required to meet certain conditions. To know more about different business scenarios and conditions, read our blog Moving to GST: For Registered Businesses and Moving to GST: Can I Avail Input Credit on Closing Stock?
In this blog, let us discuss :
What is Form GST TRAN-1?
Form GST TRAN-1 is a form to be filed by the registered taxable person to claim transitional ITC. Considering the various business circumstances in which the ITC is allowed, the Form GST TRAN-1 is categorized into 12 tables. The tax payers are required to fill the relevant tables of Form GST TRAN-1 as applicable to their business. Out of the 12 tables in Form GST TRAN-1, the details related to:
- Amount of tax credit carried forward in the return filed under previous law
- Unavailed credit on capital goods and
- Tax credit on closing stock would be relevant for most of the businesses.
Due date to file GST TRAN-1
The Form GST TRAN-1 needs to be filed within 90 days from the date of implementation of GST. However, with GST committee’s decision to allow the transitional credit in discharging July’stax liabilities, there are 2 sets of due date to file Form GST TRAN-1.
|Type of Businesses||Due Date|
|Businesses opting to avail transitional credit to discharge the tax liability of July 2017. To know more, please read How to Claim Transitional ITC in GSTR- 3B||28th August, 2017|
|Businesses planning not to avail transitional credit to discharge the tax liability for the month of July 2017.||31st October, 2017|
To know the due date of GSTR-3B, read GSTR-3B Due Date – 25th or 28th August?
Who are required to file Form GST TRAN-1?
Broadly, there are 2 types of transitional credit. The first being the closing balance of CENVAT, and Input VAT credit from last return to GST. The second being tax credit allowed on closing stock held on 30th June, 2017, in certain business circumstances. Based on this, we are listing down the businesses who are required to file Form GST TRAN-1.
- Businesses that have registered under earlier regime (Excise, VAT or Service Tax) having closing balance of Input tax credit in the June month’s return.
- Businesses registered only under VAT but have closing stock as on 30th June, 2017, which has suffered Excise duty.
- Businesses who have not registered under any of the earlier tax regime but registered under GST, and have the closing stock on which the various tax have been paid.
- Businesses engaged in manufacture/sale of exempted goods or provisions of exempted service but the said goods or services are taxable under GST and have closing stock as on 30th June, 2017, on which the various tax has been paid.
- Businesses who had opted for composition scheme in earlier regime and opted to be regular dealers, are allowed to claim the tax credit on closing stock held on 30th June, 2017.
- Businesses having unavailed ITC on capital goods are allowed to claim the unavailed portion as Transitional Input Tax credit.
- A principal manufacturer who has removed the goods for job work process under the earlier regime but those goods are to be returned in GST. The details of such goods are required to be provided in Form GST TRAN-1. Similarly, a job worker is also required to file Form GST Tran-1. To know more, read All you Need to Know about Job Work under GST and GST Migration – Goods Sent for Job Work.
The above are the common scenarios in which the businesses are required to File Form GST TRAN-1. This form is not mandatory. It is applicable only if you wish to claim the transitional credit. To know what are the taxes eligible for claiming transitional input tax credit, read our blog Taxes Eligible for ITC on Opening Stock of 1st July.
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Author: Yarab AYarab is associated with Tally since 2012. In his 7+ years of experience, he has built his expertise in the field of Accounting, Inventory, Compliance and software product for the diverse industry segment. Being a member of ‘Centre of Excellence’ team, he has conducted several knowledge sharing sessions on GST and has written 200+ blogs and articles on GST, UAE VAT, Saudi VAT, Bahrain VAT, iTax in Kenya and Business efficiency.
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