Tax Insights

(1)

1 PwC pwc.in

12 September 2022

CBIC issues guidelines providing one-time opportunity to file or revise transitional forms in view of recent Supreme Court decision

In brief

The Central Board of Indirect Taxes and Customs, GST Policy Wing (CBIC) has issued guidelines (circular)¹ to file transitional forms (i.e. TRAN-1 or TRAN-2) or revise previously filed transitional forms pursuant to a

Supreme Court decision². The guidelines have been issued with an intent to implement the directions of the Supreme Court uniformly, whereby registered persons have been allowed to file or revise transitional forms in the GST common portal, as a one-time opportunity from 1 October 2022 to 30 November 2022.

In detail

Filing or revision of transitional forms

• An applicant may file the declaration in Form GST TRAN-1 or TRAN-2 if not filed earlier or revise the TRAN-1 or TRAN-2 previously filed, duly signed or verified through electronic verification code on the common portal, along with a declaration provided in Annexure A of the circular.

• An applicant claiming credit in Table 7A of Form GST TRAN-1 on the basis of the Credit Transfer Document is also required to upload the PDF copy of TRANS-3 containing the requisite details.

• Consolidated TRAN-2 should be filed instead of filing period-wise claims, and the last month of the consolidated period should be mentioned in the column ‘tax period’ in TRAN-2.

• A self-certified copy of the declaration filed in Form GST TRAN-1 or TRAN-2 is required to be submitted to the jurisdictional tax officer within seven days of online filing, along with the declaration in Annexure A and TRANS-3, if applicable.

• Given that this is a one-time opportunity, utmost care and precaution should be taken by thoroughly checking the details before submitting the form online. Once an applicant files or revises TRAN-1 or TRAN- 2 on the common portal, no further opportunity to again file or revise the same would be provided during this period or subsequently.

1 Circular No. 180/12/2022-GST dated 9 September 2022

2 Union of India v. Trade Centre Private Limited [SLP(C) No. 32709-32710/2018] Orders dated 22 July 2022 and 2 September 2022; You may click here to refer to our Tax Insights on the Supreme Court decision.

(2)

2 PwC Tax Insights

Verification of claims

• Applicants should keep the requisite documents/ records/ returns/ invoices, in support of their claims of transitional credit, ready for verification by the concerned tax officers.

• Post filing the declaration, it will be subjected to necessary verification by tax officers which may require the submission of necessary documents to support the claim. Post verification, the tax officer will pass an order after granting the applicant a reasonable opportunity of being heard.

• The transitional credit allowed by the tax officer will be reflected in the Electronic Credit Ledger of the taxpayer on the portal.

Exclusions

• If registered persons had successfully filed TRAN-1 or TRAN-2 earlier and are not required to make any revision to the same, are not required to file or revise TRAN-1 or TRAN-2 during this period.

• Transitional credit in respect of C-Forms, F-Forms and H/ I-Forms will not be available in Tables 5(b) and 5(c) of Form GST TRAN-1, if the said forms are received post 27 December 2017.

• Where the credit transitioned earlier is rejected (wholly or partially) by the proper officer, then the

appropriate remedy available as per law, i.e. preferring an appeal or pursuing alternate remedies, should be resorted to. If adjudication or appeal proceedings are pending, filing a fresh declaration under this window is not the appropriate course of action.

Key points emerging from declaration sought in Annexure A

• In terms of the declaration sought in Annexure A, the above facility seems to have been extended to cases where transitional credit has been claimed in Form GSTR-3B, and such credit has either been reversed or not reversed with or without applicable interest.

• Annexure A also seeks a declaration from an applicant that they have neither been refunded nor have they claimed/ would claim refund of the credit of tax carried forward in accordance with section 140(1) of the Central Goods and Service Tax Act, 2017, in the return filed under pre-GST law in respect of which this claim of transitional credit is made.

• An applicant is also required to declare that they have not utilised or adjusted any amount of credit under the existing law, in response to any demand or liability arising out of self-determination or assessment or audit or investigation, out of the amount being currently claimed as transitional credit in Form GST TRAN-1 or TRAN-2.

The takeaways

The guidelines issued in light of the Supreme Court decision provide much awaited relief to aggrieved taxpayers who were either unable to file or revise incorrectly filed transitional forms. Given that this is a one- time benefit and as cautioned in the aforesaid guidelines, it is necessary that taxpayers undertake this exercise of filing or revising the forms with utmost care and maintain the necessary documentation. While the circular has clarified non-availability of this benefit to cases pending adjudication or appeal proceedings, applicability to other cases such as belated payment of pre-GST taxes, cases not involving adjudication, cases wherein TRAN- 1 audits have been closed etc. remain unclear. The outcome of this facility as to whether it would pose to be a beneficial scheme for taxpayers or increase litigation is likely to depend on the approach being adopted by the tax officers verifying these claims.

(3)

pwc.in

In this document, “PwC” refers to PricewaterhouseCoopers Private Limited (a limited liability company in India having Corporate Identity Number or CIN : U74140WB1983PTC036093), which is a member firm of PricewaterhouseCoopers International Limited (PwCIL), each member firm of which is a separate legal entity.

Tax Insights

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 156 countries with over 295,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

Follow us on

Facebook, LinkedIn, Twitter and YouTube.