Transition to GST – Question Answers with Chartered Accountant. Notwithstanding anything in GST Act, any provision of any law relating to tax on goods or services or on both in force in any State immediately before the commencement of this Act, which is inconsistent with the provisions of the Constitution as amended by this Act shall continue to be inforce until amended or repealed by a competent Legislature or other competent authority or until expiration of one year from such commencement, whichever is earlier.
This transitory provision deals with migration of existing registrants into the GST regime. All existing registrants having a valid Permanent Account Number will be issued provisional registration certificate. After furnishing required information final certificate of registration will be granted. If the information is not furnished, the registration is liable to be cancelled.
Transition to GST
|Mr A||Hello sir, Good day to you. How are you?|
|CA||I am doing fine Mr. A, how about you?|
|Mr A||I am doing fine sir. We have now really discussed much about GST, but today can you guide how can I migrate to GST from current VAT regime?|
|CA||Hi Mr. A, This is question mostly all business persons is thinking about. Let me clear you the scenario today.
The first aspect to migrate to GST is to take provisional registration currently. This can be done directly by applying for provisional registration through your existing TIN number. There will be one Provisional ID issued for one PAN based registration for each state.
Then a provisional registration will be granted on the start day of GST and then the necessary documents needs to be submitted within 3 months. Once the documents are verified successfully then a final registration certificate will be issued.
|Mr A||Ohkey, so this is how I need to progress on registration requirements. And what about the input credit which I am having in current VAT/Service tax/Excise laws?|
|CA||Mr. A, there are provisions for effective and smooth migration of your input tax credit under current laws to GST law. For your holistic view here is the chart showing various cases for carry forwarding of input tax credit to GST:
Application for availing credit on inputs/goods lying in stock can be submitted by registered person within 60 days from start of GST in form GST TRAN -1.
Hence, the input credit will be available in CGST form for carrying forward the credit of Central taxes and in SGST for carrying forward the credit of state taxes.
|Mr A||Ok, so if I am correctly filling returns and having appropriate bills then I can carry forward the input credit by filling GST TRAN -1. Let us suppose I have duty paid stock but I do not have the relevant billing document of them, then how can I take the credit of those?|
|CA||Mr A, I will really rate this an amazing question. Any registered person in GST who was exempted erstwhile or works contractor, First Stage Dealer/Second Stage Dealer, Registered Importer shall be allowed to take input tax credit on goods held in stock on the day of start of GST for which he is NOT in possession of any document evidencing payment of Central excise duty:
i) Credit allowed at the rate of 60% of the CGST paid under GST on such goods if the CGST rate on those goods is Greater or equal to 9%. IF the CGST rate is less than 9% then the credit will be allowed at the rate of 40%.
Such credit will be allowed once the CGST has been paid
Similarly any registered person (as mentioned above) shall be allowed to take input tax credit on goods held in stock on the day of start of GST for which he is NOT in possession of any document evidencing payment of Value added Tax:
i) Credit allowed at the rate of 60% of the SGST paid under GST on such goods if the SGST rate on those goods is Greater or equal to 9%. IF the SGST rate is less than 9% then the credit will be allowed at the rate of 40%.
Such credit will be allowed once the SGST has been paid.
ii) This scheme will only be available for 6 tax periods i.e. 6 months.
MJL & Co, Jaipur (Chartered Accountants)
Email – MJLco.firstname.lastname@example.org (ph – 0141-4915113)