In order to eliminate double taxation at the time of transition into GST, all taxpayers were given a facility to carry forward the unutilized input credits under pre-GST regime under section 140(1) by filing a online form named ‘TRAN-1’ and also allow the credit of taxes paid on the stock as on 30th June 2017 as GST credit under section 140(3) of CGST Act r/w Rule 117 of CGST rules, 2017 as amended inter alia requires the taxpayers to file Form GST TRAN-1 & GST TRAN-2 electronically.
Initially, the due date to file Form TRAN-1 was set to be 27.12.2017. However, many taxpayers could not complete the filing of Form GST TRAN-1 within the said due date account of IT-related glitches and also due to lack of knowledge.
Numerous petitions have been filed across the country and the Hon’ble High courts have time & again directed the Government either to reopen the portal or to allow the manual filing of the forms.
In light of these developments and acknowledging the genuine problems faced by the taxpayers, the Government has provided a window enabling the taxpayers to file the Form Tran-1 till 31.03.2019 and which is now extended till 31.12.2019.
It should be noted that this facility is available only to the persons who have attempted to file the FORM GST TRAN-1 within the initial due date i.e., 27.12.2017 but could not file the same due to technical glitches in the portal and further has digital evidence to prove the same (category-1).
Hence, taxpayers who can substantiate electronic audit trail and have digital evidence like screenshots, help desk correspondence, etc., can take benefit of this date extension and avail the earlier missed out transitional credits now. For this, an application shall be made to the Nodal officer of the IT redressal committee, not beyond 31.12.2019.
Link for reference of List of Nodal officer for application – https://cbic-gst.gov.in/cgst-nodal-officer.html
However, the aforesaid relief is not applicable to those taxpayers who:
1). have made errors or mistakes in filing and TRAN-1 could not be revised (category-2)
2). attempted filing TRAN-1 online within the due date but could not possess digital evidence like screenshots, help desk correspondence, etc. (category-3)
3). did not file TRAN-1 until now due to various reasons such as lack of awareness and ignorance, lack of IT infrastructure, the inexperience of accountants in filing such complex forms, etc. (category-4)
The category 2, 3 & 4 of the taxpayers do not have any option but to approach the High courts. Further, in case such taxpayers are not allowed to carry forward unutilized credits via filing of TRAN-1, then they could apply for the refund in terms of Section 142(3) of CGST Act as they have a vested right towards such credits.
How to Proceed:
1. First to make the assessment of the what all transition benefit the company is eligible
2. What has been missed
3. Quantification of the missed benefit
4. Documentation for the same
5. Decide on the approach one needs to take
6. Professional representation on merits before the appropriate authority
Questions for clarification
Q 1. I had made several attempts to file Tran-1 before 27.12.2017 but could not file due to unknown errors and system glitches in the GST portal. I had also made several assistance requests to the GST helpdesk. Can I file the TRAN- 1 again now? If yes when and how?
Ans:- Yes, TRAN-1 can be filed now. Application for the same needs to be given to the Nodal officer on or before 31.12.2019 with evidence of correspondence of helpdesk. For further information – please follow the steps given for category-1 taxpayers.
1). Application to be given to respective Nodal officer of the IT redressal committee of the respective area on or before 31.12.2019.
2). Application should include facts and information of the case, details of input to be carried forward as TRAN-1 credit. It is very important to note that due professional care needs to be taken in making such an application.
3). The corroborative digital evidence like screenshots, helpdesk correspondence, etc should be attached in order to establish an electronic audit trail for the department.
Q 2. I had filed TRAN-1 but had made some errors in filing due to which there remains some missed out credits. I had attempted to revise TRAN-1 but could not do so due to system limitations as the porta would not allow for any rectification. Is rectification possible now?
Ans:- In reliance to the latest judgments being in favor of the assessee, it is suggested to apply for the same. An application needs to be given to the Nodal officer at the earliest; preferably before 30.11.2019 with details of the previous form and revised input details. For further information – please follow the steps given for category-2 taxpayers.
1). Application to be given to respective Nodal officer of the IT redressal committee of the respective area.
2). The application should include facts and information of the case, details of previously filed TRAN-1 and revised or correct details of input to be carried forward as TRAN-1 credit.(preferably before 30.11.2019 as per the latest Landmark Judgement of Adfert Technologies)
3). The corroborative digital evidence of attempt of revision like screenshots, helpdesk correspondence, etc if any could be attached in order to establish an electronic audit trail for the department.
4). If the application is rejected or not acted in a reasonable time, file a writ petition before the Jurisdictional HC for necessary directions
Q 3. I did not file TRAN-1 form due to a lack of appropriate knowledge and no time for collating information due to the continuous pressure of GST implementation and its stringent due dates of monthly return filing. Can I file the TRAN-1 now and claim unutilized CENVAT credits?
Ans:- In reliance on the latest judgments being in favor of the assessee, it is suggested to apply for the same. An application needs to be given to the Nodal officer at the earliest; preferably before 30.11.2019 with appropriate details of CENVAT credits to be carried forward. For further information – please follow the steps given for category-4 taxpayers.
1). Application to be given to respective Nodal officer of the IT redressal committee of respective area (preferably before 30.11.2019 as per the latest Landmark Judgement of Adfert Technologies)
2). Application should include facts and information of the case, details of input to be carried forward as TRAN-1credit. It is very critical that all the facts and the grounds need to be taken at this stage.
3). If the application is rejected or not acted in a reasonable time, file a writ petition before the Jurisdictional HC for necessary directions
Q 4. What if there is no appropriate response from the Nodal officer or my application is rejected? Do I have any other solution or course of action?
Ans:-If the application is rejected or not acted in a reasonable time, file a writ petition before the Jurisdictional High Court for necessary directions. In view of numerous favorable HC judgments on the subject, there is a high possibility that HC may allow filing TRAN-1 electronically or manually since inputs tax credit is a vested legitimate right of the assessee.
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