Circular, 2022

Text

Reproduced from the document India Code holds for this instrument. The Gazette prints Hindi and English side by side and this is the English; the Department's own PDF remains the authority.

To, Office of the Commissioner, State Tax, Uttar Pradesh.

_- (GST Section) Letter No. GST/2022-23/ - {i} /State Tax Lucknow: Dated: 1S | November, 2022 | All Zonal Additional Commissioner Grade -1,.

Additional Commissioner Grade -2 (S.I.B.) State Tax, Uttar Pradesh.

Subject: Guidelines for verifying the Transitional Credit i in n light of the order of the Hon’ble Supreme Court in the Union. of India vs. Filco Trade Centre Pvt. Ltd., SLP(C) No. » 32709- eT 327 10/2018, order dated 22.07. 2022& 02.09. 2022- -reg.

Attention is invited to the directions issued. by the Hon’ble Supreme Court vide order dated 22.07.2022 in the matter of Union of India vs. Fileo Trade Centre Pvt. Ltd., SLP(C) No. 32709- 32710/2018. The operative portion of the judgment is as follows: “1.Goods and Service Tax Network (GSTN) is directed to open common portal for fi ling ‘concerned forms for availing Transitional Credit. through TRAN-I and L. RAN- 2: Sor two months i.e. w.e.f. 01.09.2022 to 31.10.2022.

2. Considering the judgments of the High Courts on ‘the then prevailing peculiar circumstances, any aggrieved registered assessee is directed to file the relevant form or revise the already filed form irrespective of whether the taxpayer has filed writ petition _ before the High Court or whether the case of the taxpayer has been decided by Information Technology Grievance Redressal Committee (ITGRC).

3. GSTN has to ensure that there are no technical glitch during the said time.

4. The concerned officers are given 90 days. thereafter to verify the veracity of the claim/transitional credit and. pass appropriate orders thereon on merits after. granting appropriate reasonable opportunity to the parties concerned.

5. Thereafter, the allowed T. ransitional credit is to be reflected in the Electronic Credit Ledger.

6. If required GST Council may also issue appropriate guidelines to the field formations in scrutinizing the claims. The Special Leave Petitions are disposed of accordingly. Pending applications, if any, also stand disposed of.” ‘Subsequently in Miscellaneous Application No. 1545-1546/2022 in SLP(C) No. 32709- 32710/2018, Hon’ble Supreme Court vide order dated Qn September, 2022 has inter-alia ordered as Page 1 of 17 “The time for opening the GST Common Portal is extended for a further period of four : weeks from today. It is clarified that all questions of law decided by the respective High Courts concerning Section 140 of the Central Goods and Service Tax Act, 2017 read with the corresponding Rule/Notification or direction are kept open.”

2. As is clear from the above, the Hon’ble Court has directed that the common portal be opened for filing prescribed forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months from 01.10.2022 to 30.11.2022 for the aggrieved registered assessee (henceforth, referred as ‘applicant’). The Transitional Credit claimed by the applicant shall be credited in his electronic credit ledger to the extent allowed by the jurisdictional tax officer through an order after carrying out necessary verifications. As per the Hon’ble Court’s order, the said verification has to be carried out within 90 days after completion of the above window of two months, i.e. within 90 days from 01.12.2022 i.e. upto 28.02.2023. : 2.1 It is to be noted that while allowing the applicant to file/revise TRAN-1/TRAN-2 during this window of 2 months, Hon’ble Supreme Court has kept all questions of law open. 2.2 It may be mentioned that Hon’ble Supreme Court has only allowed filing of TRAN 1/TRAN- 2 or revising the TRAN-1/TRAN-2 already filed by the applicant and has not allowed the applicant to file revised returns under the existing laws.

3. Reference is also invited to the Circular No. 2223048 dated 15.09.2022 vide which . guidelines have been issued for the applicants for filing new TRAN-1/TRAN-2 or revising the already filed TRAN-1/TRAN-2 on the common portal.

4. To ensure uniformity in the implementation of the directions of the Hon’ble Supreme Court across field formations, the Commissioner, in exercise of its powers conferred by section 168 of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as “UPGST Act”), hereby issues the following guidelines for verifying the Transitional Credit: 5, Verification of the Transitional Credit 5.1 The jurisdictional tax officers can access the TRAN-1/TRAN-2 filed/revised by the application their back office systems (which is the CBIC-AIO portal for the central tax officers, the respective State portal for MODEL-1 States and BO portal for MODEL 2 States). Further, a self- certified downloaded copy of TRAN-1/TRAN-2 filed/revised by the applicant shall also be made available to the jurisdictional tax officer by the said applicant as mentioned in Para 4.5 of Circular No. 2223048 dated 15.09.2022 . | g.

5.2. The verification of the transitional credit shall be conducted by the jurisdictional tax officer who will pass an appropriate order regarding the veracity of the claim filed by the applicant, based on all the facts and the provisions of the law. In respect of TRAN-1/TRAN-2 filed/revised by the applicant under the administrative control of the central tax authorities, such verification and issuance of order shall be done by the jurisdictional officer of central tax, whereas in respect of Yeo NB Page 2 of 17 TRAN- I/TRAN-2 filed/revised by the applicant under the administrative control of the state tax - athorities, the same shall be done by the jurisdictional officer of state tax. The jurisdictional tax officer shall. start the verification process immediately on availability of TRAN-1I/TRAN-2 filed/revised by the applicant on the back office system or on reccipt of self-certified downloaded copy of the same from the applicant, whichever is earlier. It is needless to mention that principles of natural justice shall be followed in the process of passing the order relating to allowance or disallowance of the Transitional Credit. me 5.3 The jurisdictional tax officer shall, on the basis of-declaration made by the applicant in the format specified in Annexure A to Circular No. 2223048 dated 15.09.2022 , and on the basis of data available on the back office system, shall check whether the applicant had earlier ‘filed ‘TRAN-1/ -TRAN-2 or not. In cases where TRAN-I/ TRAN:2 had already been filed by the applicant carlier, the tax officer shall check whether there is any change from the earlier filed TRAN=1/TRAN-2 or not. In case, there is no change from the earlier filed TRAN-I/ TRAN-2, then ‘such claim of transitional credit is liable for rejection by the tax offi icer, through a reasoned order, after providing due reasonable opportunity to the applicant.

53.1 In other cases, the jurisdictional tax officer shall proceed for verification of claim of transitional credit made by the applicant in F ORM TRAN- /TRAN-2. In this regard, in respect of - transitional credit pertaining to central tax, he may refer to the guidelines detailed i in Annexure I to this circular. In respect of verification of transitional credit pertaining t to the State Tt aX, the tax, officer may refer to the g guidelines detailed i in Annexure I.

5. 3.2. There may be cases “where the transitional credit claim filed/revised by the ‘applicant may have components of both central tax and state/UT tax. In such cases, where the applicant i is under the jurisdiction of state tax officer and where the transitional credit claimed has component of central tax ; also, the jurisdictional State tax officer shall refer the said claim for verification of component of - central tax to. his counterpart central officer, For this purpose, he shall share the list of GST INs/ARNs with the counterpart officer, in respect of which verification report is needed from him, ona weekly basis, along with an intimation of the same to ‘the nodal officer of central tax as well as state/UT tax referred j in Para 6.1 below through his official email [D or physically y. Similar action, as above, shall also be taken by the “jurisdictional State tax officers in cases where the applicant is under the jurisdiction of state tax officer and where’ the transitional credit claimed has component of central tax also.

5.3.3. ‘The jurisdictional tax officer shall, in parallel, continue the verification of the remaining portion of the transitional credit at his end. — - co

3. 3.4 .The jurisdictional tax officer and the counterpart tax of ficer shall verify the transitional credit claimed under the C 38T cor the SG st head, as the case may be, by referring to. the guidelines detailed in Annexure I to this circular for ‘transitional credit -pertaining to central tax and the guidelines detailed in Annexure oe to this circular for transitional credit peftaining to State tax. While conducting the verification, the officer must also check whether any adjudication or appeal proceedings i in TRAN- 1/TRAN-2 related matter are pending/concluded against the applicant. In such cases, where any adjudication or appellate proceedings have been initiated against the applicant in . (Ofe KO respect of T RAN-1/T RAN- 2, the officer should take a note of the relevant facts i in the notice/order, and the grounds/reasons for inadmissibility of transitional credit, if any, in the said notioe/order. 5.3.5 In respect of verification done by the counterpart officer, after verification, he will prepare a verification report, in the format detailed in Annexure-ILI of this circular, specifying the amount of transitional credit which may.be allowed to.be credited to the electronic credit ledger of the applicant and the amount which is liable for rejection, along with detailed reasons/ grourids on which the said amount is liable to be rejected. Such duly signed verification report ‘shall be sent by the counterpart officer to the jurisdictional tax officer at the earliest, though generally not later than ten days from the date of receipt of the request from the jurisdictional officer. In case, where the ‘adjudication or appeal proceedings | in respect of TRAN-1/TRAN-2 related matter are ‘pending/concl luded against the applicant, the counterpart officer shall categorically bring out the relevant facts i in his/her verification ‘report alongwith his detailed findings, admissibility/ inadmissibility, reasons of inadmissibility thereof and the copy of the relevant notice and/or orders: - - 5.3.6 For the purpose of verification of the claim of the transitional credit, the jurisdictional tax officer as well as the counterpart tax officer, if required, may call for relevant records including requisite documents/retumns/invoices, as the case may be, from the applicant. 53.7 Afiet receiving the verification report from the counterpart officer, the jurisdictional. tax officer shall decide upon the admissibility of the credit claimed by the applicant. In case the jurisdictional tax officer finds that the transitional credit claimed by the applicant i is partly or wholly inadmissible as per the provisions of the Act and the rules thereof, then a notice shall be issued by the jurisdictional tax officer to the applicant preferably within a period of seven days from the receipt of report from the counterpart of! ficer, secking explanation of the applicant as to why the said credit claimed by him should not be denied wholly/partly, as the case may be. The applicant shall ¢ also be provided. an opportunity of personal hearing. by the jurisdictional tax officer in such cases. If required, the jurisdictional tax officer may seek. comments ‘of the ‘counterpart officer on the submissions made by the applicant i in so far as the said submission relates to the tax (central or State) being administered by such counterpart officer. | 5.3.8 After considering the facts. of the case, including verification report, received from the counterpart officer, submissions made by the applicant and the comments, if any, of the counterpart officer on the same, the jurisdictional tax officer shall proceed to pass a reasoned order, preferably ’ within a period of fifteen days from the date of personal hearing, specifying the amount of transitional credit allowed to be transferred to the electronic credit ledger of the applicant and upload a ‘pdf copy of the said order, on the common portal for crediting the amount of allowed transitional credit to the electronic credit ledger of the applicant. In any case, such order shall be passed within a period of 90 days from 01.12.2022 i.e. upto 28.02.2023. — 5.3.9 Where the amount credited to the electronic credit ledger pursuant to the originally filed TRAN-I/TRAN-2 exceéds the amount of credit admissible in terms of the revised TRAN-1/TRAN-2 filed by the applicant, such excess credit is liable to be demanded and recovered from the applicant, along with interest and penalty, in accordance with the provisions of Chapter XV of the Act and the rules made thereunder.

O/¢ > a Page 4 of 17 du. 10 GSTN will also issue a separate advisory for entering the details ¢ on the portal by the tax officers.

6. Modalities of coordination between central tax authorities and state tax authorities : 6.1 It is to be noted that all the Zonal Additional commissioner Grade-1 shall appoint nodal officer(s) in their respective zones immediatély for proper co- -ordination between. central and state/UT authorities for verification of transitional credit claims and shall make available the details of the said nodal officers, along with. their phone numbers and email IDs, to the counterpart tax authority. The nodal officers shall ensure that the verification -reports/comments sought by. the Jurisdictional tax officers are being sent in a. timely in manner, by the counterpart officers in their 6.2 It is the responsibility of the Zonal Additional Commissioner Grade-1 to regularly monitor the progress made in this regard so that the timelines mentioned. in the Hon’ble Supreme Court’s order dated 22.07.2022 and 02.09.2022 are Strictly adhered to by whe ett formations.

7. Where any communication is required to be made by the state ‘tax X of ficer with the applicant for the purpose of verification of TRAN-1/ TRAN-2, through a mode other than through the portal, the s same should be made } in accordance with the provisions of section 169 of UPGST Act.

8. Diffi iculty if any, in ‘the implementation of this circular may be brought to the notice of the Undersig ened.

By Order, (Ministiy § ye Copy To: - -

1. Joint Commissioner (1.T.), State Tax HQ, Lucknow for uploading the Circular gn the: Departmental Website. | 6 , [ a State Tax HO, Lucknow.

Page 5 of 17 - _ GUIDANCE NOT KF OR. VERIFICAT ION OF CGST TRANSITIONAL. CREDI T : ‘CLAIMED BY THE APPLICANT IN TRAN-L FRAN- 2 a mo L. Description of Entries in TRAN-1 Table :

In the Form TRAN 1 there are only six entries which decide all the CGST credit which i is’ posted i in the electronic credit ledger. These entries are briefly described below. Ii is advised that the full text of law be referred for better understanding of the i issue. aa ~ “S| TableNowin [Provision in | ‘dict list of nature of Credit - This table captures ‘detail of the CENVAT credit carried forward i in

1. Col. in table © Sa) 140(1), the return (ER-1/2/3 or ST-3) 140(4)(a) and relating to the’ ‘period ‘ending with 140(9) 30. 06.2017, subject to ° conditions specified in “section 140(1) of CGST Act, by the _ manufactuters/service providers.

This table “captures details of un- availed credit of capital goods i in ‘the pre-GST- era. ‘Capital, Goods credit ee, was allowed to be availed in two

2. Column 11 of table 6(a) 140(2) installments of 50% each. This table me vf ve is ‘meant to be: used by the- ‘taxpayers who have: availed . a portion of CENVAT credit on capital goods through. ER or ‘ST return. and now intend to avail remaining credit in respect of capital goods which has not been availed through the ER or ST return. The said amount of credit should have been ‘admissible as ‘input tax credit under GST law as well as underexisting law.

This table pertains to credit claim by new taxpayers or taxpayers who were either not registered or were not part of CENVAT Credit chain earlier.| ~Column (6) | 140(3), Here, Credit can be claimed in

3. Table 7(a) in Entry 7A | 140(4)(b), TRAN-I in respect of inputs held mo in Table7(a) | 140(6) and instock and inputs contained in 140(7} semi-finished or finished goods held Page 6 of 17 |instock on the appointed day based on invoice/document - evidencing -|payment of ‘duty (including CTD),subject to fulfillment of other conditions specified in section 140(3), 140(4)(b), 140(6) and 140(7) as the} case maybe. | This table pertains to credit claim by | new taxpayers (c.g: traders) who were an ee ....|fot . manufacturers . or .. service Column (6) | Proviso to | providers. Deemed credit @ 60% of in Entry 7B | Section-140(3) | Central Tax applicable where’ CGST ‘| in Table 7(a) | and ~ Rule | is 9% or more, and 40% where CGST ~117(4) of | is less than 9% can be availed. The CGST Rules. provision ‘applies where the assessee is not in possession of an invoice. or . | |any other documents evidencing Bo _- -| payment of duty in respect of inputs . only. [In this case the Electronic Credit Ledger gets populated through T. RAN-2 and not "through This table captures transitional credit taken’ on such inputs or input Column (8)in Table 7(b) . | 140(5),140(7) | services which were received after | pS - | Ast of July, 2017 but taxes on which were paid under ‘the existing law (Goods/ Services ‘in Transit): It does not apply to ‘capital: goods. This table also captures credit distributed: by: ‘the Input Service Distributor. ° oe Page 7 of 17 Column 9 in-Table 8 140(8) This table pertains to Centrally Registered unit, the CENVAT credit carried. forward in their last return, is captured in table 5 (a) and ‘a part of full of such. credit can “be distributed through — ‘table 8 The “ eredit distributed through column 9 pets credited i in the electronic credit ledger of the receivers and a corresponding debit entry in made in the ledger of the Centrally registered u unit. .

6. “Column (7) in Table 11 Section I 421 1c) read with Rule ‘118 of CGST Rules Transition of credit in, “respect, of supplies which attracted both VAT and Service ‘Tax in’ pre- -GST era arid where VAT. and Service. Tax both were paid,.before Ist July.2017, on.

any supply but the supply is made ‘tafter Ist July, 2017. The tax able person is entitled to take as CGSTY credit, the. service tax paid under the existing law to the extent of supplies ‘| made‘after Ist July, 2017 as he would be liable to pay CGST in respect of such supplies. (VAT credit cannot be taken as Service tax credit. and, . vioeversa).” 2, CHECKS FOR VERIFICATION OF ENTRIES INTRAN-L win a As a matter of assistance, following checks are suggested in relation to the entries provided in various tables of TRAN 1. The list of checks is not exhaustive but is indicative only based on provisions of law, the likely error, and the inputs received from the field formations... Checks for Table 5(a):

3.1.1 Check 1: Verify that the credit has been taken against closing balance of CENVAT credit in ER-1/2/3 or ST-3. Credit can be taken only where the last return was filed and” credit taken in Table 5(a) should not be more than closing balance of credjt in ER-1/2/3 or ST-3 minus the education / secondary education cess /KKC/ SBC. 3.1.2 Check 2: Credit of taxes not covered in the definition of eligible duties in section 140 - cannot be availed. Example: Krishi Kalyan Cess, Education Cess, clean energy cess etc. Credit of VAT and PLA balance is not allowed as transitional credit. Page 8 of 17 \ 1.3 Check3: Check that returns have been filed for last 6 months. An assessee filing TRAN-1 and taking credit in table 5(a) should have- a) Filed ER-1 or ER-2 regularly between Jan, 2017 and June, 2017 or ‘-b) Filed ER-3 for period ending March, 2017 and June, 2017 or c) Filed ST-3 for period ending March, 2017 and June, 2017.

This check should be performed liberally where many units have merged into one registration or a single unit has been split into many (Centralized registration cases / LUT units) in GST. Compliance by any of the merging unit which was filing the returns in the pre-GST would entitle then ew unit to avail credit in relation to that merging unit. Checks for Table 6(a):

4.1 Check 4: Check that in table 6 only credit on capital goods not availed in any return is taken. If second installment of any capital goods credit is taken through return in table 5(a)and again the details aresfilled in table 6, it would lead to double credit getting taken. For example, the second installment of capital goods credit where first installment credit was availed in 2016-17 and second installment can be availed in the financial year 2017-18, provided the second installment was not availed in any of the returns filed in the first quarter of 2017-18 under Central Excise or Service Tax. If no credit was availed earlier, credit of entire amount cannot be availed through this Table. In respect of invoices involving large _ credit, due verification as deemed fit maybe done.

Checks for Table 7(a), Entry TA:

3.1 Check 5: In cases where the credit is being shown by an assessee. who was registered in Central Excise or Service on account of inputs relating to exempted goods, carefully check whether the assessee has followed the provisions of rule 6 of CENVAT Credit Rules in the period prior to GST.

Case I: Only exempted goods/services were being manufactured or provided: Rule 6(2) of CENVAT Credit Rules did not allow any credit in the CENVAT register if only exempted goods were being manufactured. No credit can flow from return in relation to inputs in such cases. The entry in table 5(a) therefore should be NIL. The apportionment of credit on inputs and complete reversal thereof under rule 6 of CENVAT Credit Rules took place at the time of removal of goods. Therefore, in such cases only credit of inputs and inputs contained in’semi-finished which existed in stock on the day of the transition and for which conditions prescribed in cl (i) to (v) of section 140(3) are satisfied would be available. Where the stock shown is very high, verification using VAT return or any other collateral ‘document where stocks are declared can be done.

Page 9 of 17 ss C4 CaselI: Exempted and non-exempted goods/services were being manufactured or provided: Rule 6(3) of the CENVAT Credit Rules provided the procedure for apportionment of credit relating to taxable goods/services. and reversal of credit relating. to exempted goods/services. Credit in table 5(a) would flow from the return in such cases. It should be checked that the return reflects credit after application of rule 6(3) of CENVAT Credit Rules. The reversal in terms of rule 6(3) was required to be done at the time of removal of finished goods. Therefore some credit in Table 7A can arise for such inputs which were in stock and which not attributed till the date of the transition to either exempted goods or non-exempted goods. To avail credit on such inputs, other conditions prescribed in cl (i) to (v) of section 140(3) are required to be satisfied. Where the. stock shown is very high, verification using VAT return or any other collateral document, where stocks were declared; can be done. ' §.2:Check 6: In cases where a new taxpayer has availed credit using Credit Transfer Document, check that CTD issued by the manufacturer exists and CTD has been issued in terms of rule 15(2) of CCR, 2017 read with notification no. 21/2017-CE(NT) dated 30.06.2017 (Capital Goods having value more than Rs. 25,000, goods to be identifiable by a distinct number etc.) e.g.: Dealers of newcar. | . Checks for Table 7(a), Entry 7B:

6.1 Check 7: Check that credits on stock declared on which 'credit can be claimed in terms of rule 117(4) of the CGST Rules, 2017 are reasonable. Where the stock declared in very high, stock declared in VAT return or any other collateral document, where stocks were declared, may be cross-checked. It may be noted that credit of this stock would be available on. sale being made and TRAN 2 return being filed. It is reiterated that electronic credit ledger would get populated through TRAN-2 and not through TRAN-1, » 6.2 Check 8: Check that the assessee has not declared this stock in any other table or has not _ availed this credit from any other table, say table 5(a). Where the person availing credit through TRAN 2, for which stock is declared in this table, is a trader, no credit can exist in any other table which pertains to credit to taxpayers who were registered. earlier [e.g. Table 5(a)]. | - Checks for Table 1(b):

7.1 Cheek.9: Check that the duty paying document exist and take confirmation from the taxpayer that the duty or the tax paying document were recorded in the books of account of such personas per the conditions prescribed in law. Where goods under movement are shown in exorbitant quantity, transport verification may be considered. It should also be checked that’ the conditions for availing ISD credit as prescribed in law are satisfied. . Checks for Table 8:

8.1 Check 10: Centralized registered units have distributed their credit through table 8. The. units receiving the credit were not required to file TRAN 1 to receive this credit. The Page 10 of 17 receiving units have got credit on the basis of credit distributed by the centrally registered - \aiit. Check that receiving units have not filed TRAN 1 to avail this credit as this would lead to double credit to receiving unit. Also take confirmation from the centrally registered unit that resultant credit in the ledger of the distributing centrally registered unit was reduced by the amount of credit distributed through Table 8.

9. Check for Table 11:

9.1 Check 11: Check that the service tax claimed as credit was indeed paid under the existing law and supplies were indeed made after Ist July, 2017. Credit of VAT cannot be taken as CGST credit and vice-versa.

10. General check:

_10.1 Check 12: Check that credit which is being claimed through TRAN 1/TRAN-2 is not taken through return in FORM GSTR-3B. This can lead to double credit being taken. 10.2 Clarifications issued vide circular no. 33/07/2018-GST dated 23.02.2018 regarding disputed credit and blocked*credit may be followed during the verification process of the transitional credit.

OR es he oie ois a oe ee a Page 11 of 17 Annexure- II _ GUIDANCE NOTE FOR VERIFICATION OF SGST TRANSITIONAL CREDIT

CLAIMED BY THE APPLICANT IN TRAN-1/TRAN-2

| No.

Table No. in Provision in

UPGST

Act Indicative list of nature of Credit table 5(c) 140(1), 140(4)(a) | 30.06.2017, subject to conditions This table captures detail of the VAT credit carried forward in the return relating to the period ending with specified in section 140(1) of UPGST Act, by the manufacturers/service providers.

- table 6(b) 140(2) GST law as well as under existing This table captures details of un- availed credit of capital goods in the pre-GST era. Capital Goods credit was allowed to be availed in three.

installments in first return of).

succeeding three financial years. This table is meant to be used by the taxpayers who have availed a portion of VAT credit on’ capital goods through return and now intend to avail remaining credit in respect of capital goods which has not been availed through the return. The said amount of credit should have been admissible as input tax credit under law.

140(6)and - either not registered or were not part This table pertains to credit claim by new taxpayers or taxpayers who were of VAT Credit chain earlier (Non- VAT goods). Here, Credit can be claimed in TRAN-1 in respect of inputs held in stock and inputs contained in semi;finished or finished goods held in stock on the appointed day based ~— on invoice/document evidencing payment of duty, subject — to fulfillment of other conditions specified in section 140(3), 140(4)(b), Page 12 of 17 140(6) and 140(7) as the case maybe.

Table 7(c) and 7(d) Proviso — to

Section 140 (3) and Rule 117(4) of UPGST Rules:

This table pertains to credit claim by taxpayers (e.g. traders) who were.

engaged in trading of Non-VAT goods. Deemed credit @ 60% of State Tax applicable where SGST is 9% or more, and 40% where SGST is less than 9% can be availed. The provision applies where the assesse is not in possession of an invoice or any _| other documents evidencing payment ‘of duty in respect of inputs only. [Jn this case the Electronic Credit| Ledger gets populated through TRAN-2 and not through TRAN 1}.

Column (8) in Table 7(b) a This table captures transitional credit taken on such inputs which were received after 1st of July, 2017 but taxes on which were paid under the existing law (Goods in Transit). It does not apply to capital goods. This table also captures credit distributed.

by the Input Service Distributor.

Column (7) in Table 11 Section 142(11)(c) read with Rule 118 of UPGST Rules Transition of credit in respect of supplies which attracted. both VAT and Service Tax in pre-GST era and where VAT was paid, before Ist July 2017, on any supply but the | supply is made after 1st July, 2017.

The taxable person is entitled to take as SGST credit, the VAT paid under the existing law to the extent of supplies made after 1st July, 2017 as he would be liable to pay SGST in respect of such supplies.

' Page 13 of 17 Cy Checks for Table 5(c): a Check 1: Verify that the credit has been taken against closing balance of VAT credit in Form-24. Credit can be taken only where the last return was filed and credit taken in Table 5(c) should not be more than closing balance of credit said return. Check 2: Credit of taxes not covered in the definition of eligible duties in section 140 cannot be availed. An amount paid as advance tax shall not be admissible as credit. Check 3: Check that returns have been filed for last 6 months. An assesse filing TRAN-1 and taking credit in table 5(c) should have- . d) A dealer liable to file monthly return has filled form 24 regularly between Jan, 2017 and June, 2017. or.

oe e) A dealer liable to file monthly return has filled form 24 regularly between Jan, 2017 and June, 2017.

Checks for Table 6(b):. + - a | Check-4: Check that in table 6 only credit on capital goods not availed in any return is taken. . - Under Rule 24 of UPVAT Act, the ITC on capital goods could be availed in three successive annual installments and the first such installment was to be claimed in the tax return of first - tax period of the succeeding financial year in which the capital goods were bought. Care should be taken for double claim of such ITC in VAT returns as well by transfer through TRAN. If no credit was availed earlier, credit of entire amount cannot be availed through this © Table. In respect of invoices involving large credit, due verification as deemed fit maybe done. - Checks for Table 7(b), 7(c) and 7(d) Check-5: Check that the Duty or Tax paying document exist and take confirmation from the taxpayer that the duty or the tax paying document were recorded in the books of account of such person as per the conditions prescribed in law. Where goods under movement are shown in ~ exorbitant quantity, transport verification may be considered. Cross verification of annexures of seller and purchaser may also be done in this regard. . Page 14 of 17 | . ANNEXURE-III

VERIFICATION REPORT FOR. TRAN-I/TRAN-2 TO BE SUBMITTED BY THE

COUNTERPART OFFICER TO THE JURISDICTIONAL TAX OFFICER

1. Basic information:

(a) | Name

(b) | GSTIN

(d) | Whether transition credit claimed earlier Yes/ No

2. (a) Whether SCN/Adjudication order issued in respect of credit availed through TRAN- 1/TRAN-2 filed earlier; if “Yes”, provide reference number and date: ~ |

(b) If answer to (a) above is “Yes”, then amount of transitional credit disallowed/proposed to be disallowed out of total claim filed by the applicant earlier: “Table of |* Amount of credit © | @Grounds on > Whether TRAN- disallowed/ proposed | which credit is recovered 1/TRAN-2 to be disallowed disallowed/ ' proposed to be disallowed (a) (b) (c) Notes:

1) Add additional rows ifrequired __

2) *Specify the serial number of the Table (of earlier fi led TRAN-1/TRAN-2), the credit in — respect of which has either been disallowed through an order or is proposed to be disallowed

3) #Specify the amount which has been disallowed/proposed to be disallowed _ 4) @Specify the grounds for disallowance of the said credit

5) $Specify whether amount has been recovered, either in cash or debit to credit ledger ..

6) Attach copies of the relevant notice/ adjudication order

3. (a) Whether appeal has been filed against the adjudication order, if any, specified in serial ~ number 2 above; if “Yes”, provide appeal number and date of filing appeal.

(b) If appeal has been disposed of, then provide order number and date:

(c) Details relating to Appellate Order: :

“Table of TRAN- | Findings of Appellate | * Whether recovered 1/TRAN-2 Authority

(a) | __s . (b) . .

(c) Page 15 of 17 Notes:

y)

1) Add additional rows ifrequired “Specify the serial number of the Table (as mentioned in Table at serial number 2 above ) and. the amount of tax the claim in respect of which has been adjudicated and the appeal has been decided. . $Specify whether amount has been recovered, either in cash or debit to credit ledger — Attach copies of the order of the appellate authority ee Amount of credit claimed afresh/revised (as per TRAN-1/ TRAN-2 filed/ revised during the present window of two months)by the applicant, the amount admissible, the amount inadmissible, if any, along with the grounds/ reasons for non-admissibility thereof: Amount o Amount Amount - {| Grounds of Claimed In| Admissible. inadmissible, if inadmissibility, newly filed/ | - any . | along with the revised TRAN-. 7 relevant 1 / TRAN-2 Oo provisions of. a ~ | law/ rules |

UTGST

7(a(7A) of 7(a)(7B) of - TRAN-] Page 16 of 17 11 of Aggregate

(m) | of Table 4 of TRAN-2 Aggregate

(n) | of Table 5 of TRAN-2

5. Other relevant information, if any (Please give details): ‘ Place:

Date:

Signature of counterpart officer (Name and designation of counterpart officer) Page 17 of 17

Provisions this circular answers to

Read out of the instrument itself: an enabling provision is one it says it was made under, which is the power it rests on. The rest it names without resting on.

Other instruments under the same Act

All of the The Uttar Pradesh Goods and Services Tax Act, 2017