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Indirect Tax Alert - CBIC issues guidelines for filing / revising Form GST-TRAN-1 / GST-TRAN-2 as per the Supreme Court order

15 September 2022

  • The apex court had directed the Goods and Services Tax Network (GSTN) to open a common portal for filing TRAN-1 and TRAN-2 for two months i.e. w.e.f. 1 October 2022 to 30 November 2022 vide its order dated 22 July 2022 in the matter of Union of India vs. Filco Trade Centre Pvt. Ltd. and another order dated 2 September 2022, wherein any aggrieved assessee could file or revise TRAN-1 and TRAN-2, irrespective of whether writ petition filed before the High Court or whether the case was decided by Information Technology Grievance Redressal Committee (ITGRC)
  • The GSTN is to ensure that there are no technical glitches during the said time
  • The concerned officers are given 90 days thereafter to verify the claim and pass appropriate orders after granting an appropriate reasonable opportunity to the parties concerned
  • Thereafter, the allowed transitional credit is to be reflected in the Electronic Credit Ledger(ECL)
  • If required, GST Council could also issue appropriate guidelines to the field formations in scrutinizing the claims
  • CBIC has issued guidelines1 for filing or revising TRAN-1/TRAN-2, in terms of aforesaid orders, as follows:
    • The applicant may file or revise duly signed or verified (through electronic verification code) TRAN-1/TRAN-2 on the common portal. A facility for downloading TRAN-1/TRAN-2 already furnished will be made available, in order to revise the same
    • While filing or revising, the applicant shall also upload the PDF copy of a declaration in the format as given in Annexure ‘A’ of this circular. The applicant claiming credit in table 7A of TRAN-1 on the basis of the Credit Transfer Document (CTD) shall also upload the PDF copy of TRANS-3, containing the details in terms of the notification no:21/2017-CE(NT) dated 30 June 2017
    • No claim for transitional credit shall be filed in tables 5(b) & 5(c) of TRAN-1 in respect of such C-Forms, F-forms and H/I-forms which have been issued after the due date prescribed for submitting the declaration in TRAN-1 i.e., after 27 December 2017
    • Where the applicant files a claim in TRAN-2, he shall file the entire claim in one consolidated TRAN-2, instead of filing the claim tax period-wise as referred to in rule 117(4)(b)(iii) of the CGST Rules 2017. In such cases, in the column ‘Tax Period‘ of TRAN-2, the applicant shall mention the last month of the consolidated period for which the claim is being made
    • The applicant shall download a copy of the TRAN-1/TRAN-2 filed and submit a self-certified copy of the same, along with declaration in Annexure ‘A’ and a copy of TRANS-3 (if applicable) to the jurisdictional tax officer within 7 days of the filing of declaration in TRAN-1/TRAN-2 on the common portal. The applicant shall keep all the requisite documents/records/returns/invoices, in support of his claim of transitional credit, ready for making the same available to the concerned tax officers for verification
    • This is a one-time opportunity for the applicant to either file or revises the forms. Hence it is required to take utmost care while filing or revising TRAN-1/TRAN-2
    • The applicant is allowed to modify/edit, add or delete any record in any of the table of the said forms before clicking the “Submit” button. Once submitted, the form gets frozen, and no further editing of details is allowed. Such frozen form would then be required to be filed on the portal using the ‘File’ button, with a Digital signature certificate (DSC) or an EVC. Thus, the correctness of all the details in TRAN-1/TRAN-2 shall be ensured before submitting. GSTN will issue a detailed advisory in this regard and the applicant may consider the same while filing
    • Once, the applicant files or revises TRAN-1/TRAN-2, no further opportunity to again file or revise, will be allowed either during this period or subsequently
    • Registered persons who had 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 TRAN-1/TRAN-2 during this period
    • In cases where the credit availed by the registered person on the basis TRAN-1/TRAN-2 filed earlier, has either wholly or partly been rejected by the proper officer, the appropriate remedy is to prefer an appeal against the said order or to pursue alternative remedies available as per law. Where the adjudication proceeding in such cases is pending, the appropriate course would be to pursue the said adjudication. In such cases, filing a fresh TRAN-1/TRAN-2 as per this circular is not appropriate
    • The declaration in TRAN-1/TRAN-2, filed/revised by the applicant will be subjected to necessary verification by the concerned tax officers. The applicant may be required to produce the requisite documents/records/returns/invoices in support of their claim of transitional credit before the concerned tax officers for verification of their claim. After the verification of the claim, the jurisdictional tax officer will pass an appropriate order, after granting an appropriate reasonable opportunity of being heard by the applicant. The transitional credit allowed as per the order passed by the jurisdictional tax officer will be reflected in the ECL of the applicant

BDO Comments

The circular has laid down the process for claiming the transition credit which the taxpayers have to follow. One important change, as opposed to the previous mechanism, is that this time, the jurisdiction officer would first scrutinize the claim and then pass an order allowing the amount of eligible transition credit which would be reflected in the Electronic Credit Ledger of the taxpayer. Hence, taxpayers would need to have all the supporting documents ready with them, so as to facilitate the verification by the jurisdictional tax officer. Further, the powers under which the order allowing or rejecting the credit would be issued, and provisions of appeal, etc. against such order would also need to be clarified.


1 Circular No:180/12/2022-GST dated 09 September 2022