The Hon’ble Supreme Court of India in the case of UOI Vs M/s. Filco Trade Centre Private Limited 2022 (63) G.S.T.L. 162 (S.C.) permitted the taxpayers for Filing/revising FORM (Trans-1) for availing the Transitional Credits.
The GST was implemented from 01st July 2017. As on 30.06.2017, there were closing balances of unutilized VAT, Excise Duty and Service Tax Input Credits laying in books of accounts of the Taxpayers. For carry forwarding of such closing input tax credits into GST Credit Ledger, Section 140 of the GST Act, 2017 prescribed the form Trans-01 and time limit to file the Form was 27.12.2017.
However large number of taxpayers faced technical/teething problems in the GSTN Portal while filing the Form Trans-1 & could not submit. Some taxpayers due to system glitches got the part of the Input Tax Credit into their ledger instead of full amount. Some entities were not even aware of this facility & thereby lost the credits.
Several appeals were filed before the Supreme Court praying for one more opportunity for availing the Transitional Credits. On this background, hon’ble Supreme Court generously gave the green signal for availing the Transitional Credits.
Who can avail the benefit of the judgment of Supreme Court: –
1) Some taxpayers have not availed the VAT closing balance of Input Tax Credit on the pre-text that they can go for VAT Refund. However due to scarcity of the funds with the AP Govt they have not got such refunds.
2)Many of VAT Dealers like automobile show rooms, they have not availed the Excise Duty credit involved on the closing stock of goods as on 30th June 2017.
3)Even if there is no Excise Duty paying document, the VAT dealers can avail the deemed credit.
4)Construction/Infra Companies also entitled to avail Excise Duty credit involved on the closing stock of goods like steel, cement & iron e.t.c as on 30th June 2017.
5)Any service tax paid reverse charge after GST implementation can also explore the opportunity to file Trans-1.
6)Construction/Infra Companies who were under the Composition Scheme under the VAT Regime, they can also avail the VAT Input Credit on the closing stock of goods.
7)Any CVD, Special CVD (SAD) paid after GST implementation due to export obligation non-fulfilment can also explore the opportunity to file Trans-1.
The above instances are only examples, there may be many such instances & possibilities. Supreme Court gave the time up to 30th Nov 2022 to file the Trans-1 or to revise the Trans-1 for making the corrections & get the Credits into Electronic Credit Ledger. These additional credits would add some buffer to the working capital requirements.
(The writer is a Chartered Accountant, Partner in HIREGAGE & Associates. He is also CMA, LL.V specialized and domain expert in Customs, Goods & Service Tax Law, Foreign Trade Policy, EOU’s & SEZs.Views are personal)