FAQ on TRAN 1, Important Questions Related to TRAN-1 with Solutions

FAQ on TRAN 1, Important Questions Related to TRAN-1 with Solutions. As per the transitional provisions of CGST/ SGST/ UTGST Act, registered person can take credit of taxes or duties paid under existing State or Central laws, like Value Added Tax Act, Central Excise Act and Service Tax laws and carry them forward to the GST regime, if the same are eligible as CGST/SGST/UTGST credit, subject to conditions/ limitations as prescribed in the GST Act and rules. These transitional credits can be claimed through TRAN – 1 and TRAN – 2.

FAQ on TRAN 1

FAQ on TRAN 1

2. Why do I need to file transition Form GST TRAN – 1?

Every registered person who is eligible to take credit of eligible duties and taxes paid under existing laws in respect of input or input services or capital goods in his/her Electronic Credit Ledger, needs to file a declaration in Form GST TRAN – 1 within 90 days + extended days of the appointed day (1st July 2017).

After successful filing of transition Form GST TRAN – 1 online, the credit will be credited/posted to their Electronic Credit Ledger and can be utilized for discharge of liabilities under GST regime.

3. What do I need to do to submit the transition Form GST TRAN – 1?

You need to login to the GST Portal and navigate to Services > Transition Form > TRAN – 1. Fill the form and then you need to submit, file the form attaching DSC/ EVC.

4. By when do I need to file the transition Form GST TRAN – 1?

Transition Form GST TRAN – 1 has to be filed within <90 days > from the appointed day (1st July 2017). The time limit can be extended by another 90 days by the commissioner on the recommendation of GST Council.

5. Can I make any amendment to the transition Form GST TRAN – 1?

A one-time revision provision is being made available for taxpayers who have either submitted or filed their Tran-1. However, the details of transfer of cenvat credit for registered person having centralized registration under existing law (Section 140(8)) as declared in previous submission can-not be revised downwards. However, you may transfer more credit if applicable.

6. Do I need to attach any document along with transition Form GST TRAN – 1?

There is no requirement for uploading any documents as an attachment along with transition Form GST TRAN – 1. Wherever details are beyond a limit the same will be uploaded to the portal through an Offline Utility tool.

7. I am registered as composition taxpayer. Do I need to submit the transition form?

Transition Form is not to be submitted by the taxpayer registered as composition taxpayer under GST Law. Also, Transition form will not be displayed to the composition dealer.

8. What will happen once the transition Form GST TRAN – 1 is filed?

Once the transition Form GST TRAN – 1 is successfully filed, ARN is generated and transition credit will be credited to the Electronic Credit Ledger of GSTIN mentioned in the form.

9. What will happen if the transition Form GST TRAN – 1 is submitted but not filed with DSC/EVC? 

Credit claimed in TRAN – 1 gets credited to the taxpayer’s credit ledger on successful submit of the TRAN – 1 form, however filing of the form with prescribed electronic signature is necessary for subsequent utilisation of the credit. GSTR-3B cannot be filed if the same credit is utilized for payment of liabilities declared therein unless until the TRAN – 1 is filed. After submit, the taxpayer cannot change any entries of the TRAN – 1, hence the declaration need to be thoroughly checked before submitting TRAN – 1.

10. What is the correlation of various sections of the CGST Act and sections of the GST Form TRAN – 1 for availing credit?

Please refer to following table for correlation of the various sections of the CGST Act and sections of the GST Form TRAN – 1.

Section of Form TRAN 1

Relevant section of CGST / SGST Act

Headings

Table 5

Section 140(1) and 140(4)(a) of CGST Act

Amount of tax credit carried forward in the return filed under existing laws

Table 6

Section 140(2) of CGST Act

Details of capitals goods for which unavailed credit has not been carried forward under existing law (section140 (2))

Table 7

Section 140(3), 140(4)(b), 140(5) and 140(6) of CGST Act

Details of the inputs held in stock in terms of sections 140(3), 140(4)(b), 140(5) and 140(6)

Table 8

Section 140(8) of CGST Act

Details of transfer of cenvat credit for registered person having centralized registration under existing law (Section 140(8))

Table 9

Section 141 of CGST Act

Details of goods sent to job-worker and held in his stock on behalf of principal under section 141

Table 10

Section 142(14) of SGST Act

Details of goods held in stock as agent on behalf of the principal under section 142 (14) of the SGST Act

Table 11

Section 142(11)(c ) of CGST Act

Details of credit availed in terms of Section 142 (11 (c ))

Table 12

Section 142(12) of CGST Act

Details of goods sent on approval basis six months prior to the appointed day (section 142(12))

11. I am getting an error message – “Processed with error” when I am saving the details of the existing registration while claiming transitional credit in the TRAN-1 form. What should I do now?

You can get error message as “Processed with error” while saving the details of existing registration in the Form TRAN-1.

During Enrolment / Registration, you were given an opportunity to enter details of the existing registration. In case the details of existing registration in TRAN 1 do not match the details of existing registration entered in the Registration/ Enrolment application, Business Details tab, the error is displayed.

In case you face the error, you need to include the existing registrations in your Enrolment/ Registration details using the non-core amendment facility and then file TRAN-1 to claim the transitional credit.

While filing the application of non-core registration amendment, you MUST take care of the following at the relevant places in the Registration application:

  • Do not use special characters (-, /) while adding Service Tax No./ Central Excise No./ VAT/ TIN on the Business Details Tab.
  • Do not give duplicate e-mail or phone number for Promoters/ Partners or Authorized Signatories.
  • Check that the Service Accounting Code (SAC) provided during migration has been provided as per new service codes (and not the earlier ones).
  • Ensure that the STD code is entered correctly in the field provided and it is not entered in the field for entering the local Telephone number.

12. What is Re-open button?

Re-open button is given only for those users that have either submitted or filed TRAN-1. Re-open functionality can be used only in case of any modification to previously submitted/ filed data or for adding missing records.

Currently this option would be available only for taxpayers who have submitted/filed it before this option is made available on GST portal. It would be extended to everyone filing their Tran-1 before November 30th or as extended.

13. Can I modify/ delete data in Table-8?

Modification or deletion of already submitted data in Table-8 is not allowed. But you can Add/ Modify/ Delete data which are newly added after reopening the TRAN-1 Form.

14. What is the limit of entries for table 6a, 6b and 7b in offline mode?

10,000 entries is the limit at a time for table 6a, 6b and 7b in offline mode in single upload to GST Portal. In case of more number of records you may upload them sequentially in batches of 10K.

15. What is the impact of Tran downward revision to my Credit ledger and Liability Register ?

In case the transitional credit declared in revised Tran-1 is less than Tran-1 credit as declared in previous submission / filing, the delta ITC credit shall be debited from your credit ledger (provided you have sufficient ITC balance in credit ledger). In case of insufficient ITC balance, the amount left after credit utilization would be posted to your liability register.

Please note currently submission/filling is possible only in case you have sufficient ITC in credit ledger to set-off downward revision. In case you have utilized the ITC availed previously the option to revise downward with liability creation would be provided soon.