NATIONAL ACADEMY OF CUSTOMS, INDIRECT TAXES AND

NARCOTICS, ZONAL TRAINING INSTITUTE,

VISAKAHPATNAM

REFRESHER COURSE ON GST TO STATE GST OFFICERS

TOPICS :
Transitional provisions under GST
Study of various tables - GST Tran- 1 declaration form
What is to be checked by Enforcement Departments
Departmental officers, Jurisdictional officers, Audit/
Enforcement wings.
VEDANTHAM SRINIVAS
Superintendent
Office of ADG Audit, Central GST,
Hyderabad
+91 9442030085
vishnuvedantham@gmail.com
 Transitional Provisions – GST

Act Provisions – Section 140, 141 and 142

Sec 140 – Credits
Section 141 – Job work
Section 142 – various other transitional issues
CGST Rules – Rule 117 to 121
Rule 117 – Tax credit under earlier laws (in Act termed as
existing laws)
Rule 118 – 142 (11) (c) declaration – proportionate amount of
VAT & Service tax paid on supplies commenced earlier.
Rule 119 – Stock held by principal and job worker.
Rule 120 – goods sent on approval basis
Rule 120A – revision of declaration
Rule 121 – Recovery of credit wrongly availed.
 relevant sub-sections dealt in GST TRAN 1

Section 140 (1) – Out standing credit balances in ER1/ST3/ VAT returns.
Sec 140 (2) – Un-availed Cenvat Credit on Capital goods/ VAT credit –
means not shown in previous returns.
Section 140(3) - not liable to be registered under earlier laws/ dealing
with exempted goods/ services/ earlier availing exemptions/ threshold
limits etc.
Section 140(4) – engaged in manufacture of both taxable and exempted
goods/ services – then ITC attributable to exempted goods. / services2 –
various other transitional issues
Section 140(5) – Taxes (CE/ S. Tax) paid before 01.07.2017, but Inputs/
input services received after 01.07.2017 Invoices received after
01.07.2017
 Transitional Provisions – GST

Certain Basics to remember –

1. Eligibility of ITC on inputs under GST – Taxes paid on certain goods
or services not available as ITC
Section 17(5) of CGST Act – non-availability of ITC - Taxes paid on
motor vehicles and other conveyances (certain exceptions- like same are
used again in supply of motor vehicles/ Transport )
food and beverages,
outdoor catering,
beauty treatment,
health services,
cosmetic and plastic surgery
rent-a-cab, life insurance and health insurance
 S. No. 5(a), 5(b) and (c)

1. 140 (1) - entitled to take –

amount of CENVAT credit carried forward
in CE/ ST/ VAT returns for the period ending 30.06.2017.
2. 140 (4) (a) - engaged in manufacture of taxable and exempted
goods under CE Act/
Taxable/ exempted services under Fin. Act,
But now his supplies become taxable supplies
entitled for Credit carried forward in returns.
3. 140 (9) – Service - Credit availed but reversed as payment not made
in 90 days
But amount of Cenvat that can be reclaimed after making payment to
service provider
Time limit – 90 days.
In 5(a) , against column No. 6 credit to be reclaimed under
140(9) is to be shown.
 S. No. 5 (a) and 5(b)

 H & I forms
 S. No. 5(a) and (b) – checks

C.B.s shown in CE/ Service Tax / VAT returns = amounts shown in

Tran 1 declaration.
Also admissible as input tax credit under GST – refer Section 17(5)
Whether file CE/ ST/ VAT returns for period from 01.01.2017 to
30.06.2017 –
Last six months period.
In case of manufacturers – Check if such Cenvat credit balance
shown relate to goods manufactured and cleared under such
exemptions notified by Government.
S. No. 5 (c)
 S. No. 5(c)
1. 5 (c) – ITC under VAT –
C-Form (concessional rate sales between two states),
F Form (Branch Transfers @ NIL VAT rate),
H form (interstate movement for export purposes),
I Form (sales to SEZ units/ developers).
2. Second proviso under Section 140 (1) of AP SGST Act - input
credit under VAT - attributable to claims under Section 3, 5(3), 6, 6A or
8(8) of CST Act which is not substantiated within time limits - not
permissible).
If substantiated later, refund under CST Act would be granted
5 (c) relate to determination of Input Tax credit under VAT in which
details of turnover relating to
 S. No. 5(c)
CST Act provisions –
Sec. 3 : When is a sale or purchase of goods said to take place in the
course of inter-State trade or commerce
Section 5 (3) - last sale or purchase of goods preceding the sale or
purchase occasioning the export of those goods - deemed to be in
the course of such export
Sec. 6 : Liability to tax on inter-State sales
Sec. 8(8): declaration about sales to SEZ supplies
 S. No. 6(a)

S. No. 6(a) – Under Section 140 (2) – Un-availed CENVAT credit

pertaining to capital goods,
not carried forward in returns filed on 30.06.2017
Capital goods – Cenvat Credit of only 50% is permissible –
in first financial year of procurement.
Remaining 50% - only in next fin. Year.
S. No. 6 (a)
 S. No. 6(a)

Checks:
i) credit claimed must be admissible credit under previous Acts (CE Act/
VAT Act)
Also should be admissible as ITC under GST.
i) Separately show the amounts of credit on capital goods availed/
utilised (first 50%)
ii) Balance credit yet to avail or utilised are clearly shown separately.
 S. No. 6 (b)

Under S. No. 6(b) - Un-availed ITC carried forward to Electronic credit

ledger of State/ UT Tax ( For all registrations on the same PAN and in
the same State)
 S. No. 6 (b)

Cd
 S. No. 6 (b) – Checks

Whether i) credit so claimed is admissible credit under CE Act/ VAT Act

and also whether the same is admissible as input tax credit under GST.
Ii)credit on capital goods availed/ utilised and
iii) credit on capital goods yet to be availed or utilised are clearly shown
separately.
 S. No. 7(a) and 7 (c)
S. No. 7(a) – inputs or input stocks - details of CE duties
S. No. 7(c) – Inputs or input stocks – details of VAT (earlier
exempted presently taxable
140(3) –Presently – Registered person – making taxable supplies under
GST
Ex: 1. Under Central Excise availed SSI exemption upto 60 lakhs but
As now crossed 20 lakhs threshold limit
2. Under VAT a trader having turnover below the threshold limit but
Now making supplies through e-commerce portal.
But Previously - not liable to be registered under previous laws or
engaged in manufacture of exempted goods or
Provided exempted services or
providing WCS - availed under No. 26/2012—ST dated 20.06.2012 or
registered importer, first stage dealer or second stage dealer or
manufacturer’s depot
Now all the above persons shall take registration as their activities fall
under Supplies
Hence ITC can be availed
 S. No. 7(a) and 7 (c)
140 (4) (b) - manufacture taxable/ exempted goods, provision of taxable
/ exempted services - but liable to tax under GST –
entitled to take credit – attributable to inputs / contained in semi-finished
or finished goods in stock relating to exempted goods on 01.07.2017,
140(5) – Taxes paid under CE Act, / Fin. Act/ VAT before
30.06.2017 –
But inputs / input services received on or after 01.07.2017 – eligible take
credit of such goods/ services.
140(6) – Paid tax at a fixed rate/ fixed amount (compounded levy) under
CE Act – But
Now making taxable supplies as per GST –
take credit on inputs / contained in semi-finished or finished goods as on
01.07.2017
140(7) – Services were provided before 01.07.2017,
But tax invoices received by ISD (Input Service Distributor) only after
01.07.2017,
But Services were provided prior to 30.06.2017.
 Eligible duties specified under 140 (6) – GST

For transitional credit under Section 140(3), (4) and (6) –

Eligible duties for credit transfer – as per explanation 1 under Section
140
Central Excise Duty under Central Excise Tariff Act
Additional duty of excise GSI
Additional duty of Excise (Textile and Textile articles)
Additional duty of Customs – on imports (CVD – in lieu of Excise duty)
Additional duty of Customs – on imports (SAD – in lieu of Sales Tax)
P.S.: Any type of Cess – not listed.
Hence, Credit of Cess ( Krishi Kalyan Cess etc.) of any type is not
eligible for transfer.
 S. No. 7(a) and (c)

S. No. 7(a) and (c) For transitional credit under Section 140(3), (4) and
(6) –
Inputs in stock/ inputs lying in semi-finished goods / finished goods lying
in stock
7(a) – for Central Excise (invoices available / not available)
whether the registered person is eligible for ITC on these inputs.
whether in possession of Invoice/ other prescribed documents which
were issued after 01.07.2016 (only one year backwards from
01.07.2017).
Registered persons availing credit under 7A shall also file GST TRAN3
besides availing the same under inputs.
7(c) – for VAT
Whether duties were paid by the supplier in terms of previous Laws.
Whether invoice details were recorded within 30 days from 01.07.2017
i.e. by 30.07.2017 or within further time as extended by Commissioner.
S. No. 7 (a) – Excise duty Credit
 S. No. 7 (c) – VAT –
inputs/ inputs lying in semi-finished/ finished goods
 S. No. 7(a) and (c) – Checks

7(a) – for Central Excise (invoices available / not available)

whether the registered person is eligible for ITC on these inputs.
whether in possession of Invoice/ other prescribed documents which
were issued after 01.07.2016 (only one year backwards from
01.07.2017).
Registered persons availing credit under 7A shall also file GST TRAN3
besides availing the same under inputs.
7(c) – for VAT
Whether duties were paid by the supplier in terms of previous Laws.
Whether invoice details were recorded within 30 days from 01.07.2017
i.e. by 30.07.2017 or within further time as extended by Commissioner.
 S. No. 7(b)

S. No. 7(b) – ITC details of State VAT/ ET &

ISD invoice details which were received after 01.07.2017
It contains details of CE/ S. Tax / VAT
140 (5) – Taxes paid under CE Act, / Fin. Act/ VAT before
30.06.2017 –
But inputs / input services received on or after 01.07.2017 – eligible
take credit of such goods/ services.
140(7) – ITC on account of any services received prior to
01.07.2017 by earlier ISD registrant–
Now also Eligible for distribution under GST though invoices
received after 01.07.2017
Make entries of such ISD invoices under 7(b)
P.S.: Any type of Cess – not listed under Explanation No. 2 under 140
Hence, Credit of Cess ( Krishi Kalyan Cess etc.) of any type is not
eligible for transfer.
S. No. 7 (b)
 S. No. 7(b) Checks

S. No. 7(b) - For transitional credit under Section 140(5),& 140(7)

Inputs in stock/ inputs lying in semi-finished goods / finished goods lying
in stock
Eligible duties for credit transfer – Section 140 (5)
Central Excise Duty under Central Excise Tariff Act
Additional duty of excise GSI
Additional duty of Excise (Textile and Textile articles)
Additional duty of Customs – on imports (CVD – in lieu of Excise duty)
Additional duty of Customs – on imports (SAD – in lieu of Sales Tax)
Service Tax under Section 66B of Finance Act – Service tax by
service provider (Under Reverse charge mechanism not included).
 S. No. 7 (d)

It contains only VAT/ ET data – without VAT invoices

Proviso to Section 140(3) – inputs / semi-finished / finished
goods lying in stock
When no invoices/ bills are available (showing tax payments.)
Details of goods received but not supported by invoices
When no bills – applying 60%/ 40% in case GST is > 9% or <
9% as the case may be.
S. No. 7 (d)
 S. No. 7(d)- checks

7(d) –
Whether details of only such stocks not supported by documents
evidencing tax payment shown against S. No. 7 (d).
Whether Credit claimed in such cases is - 60% (When goods attract more
than or equal to 9% Central Tax) /
40% (When goods attract < 9% of Central Tax).
Whether inputs or goods are used or intended to be used for taxable
supplies under GST.
Whether the registered person eligible for input tax credit on these
inputs under GST.
Whether the Taxable person is filing GST TRAN2 regularly (1st
Statement by 31st March, 2018 – introduced vide Notfn. No. 12/2018 dt.
07.03.2018) and subsequent statements for six tax periods.
GST TRAN2 - Details of input stocks for which no documents available
are utilised by registered person in subsequent six tax periods from
31.03.2018 onwards.
 S. No. 8

What to enter:
140 (8) – having centralised registration (ISD Regn. For Service Tax) and
under GST also obtained a registration – eligible to take, CENAT credit
carried forward in a return.

Checks by Dept –
Whether ISD registrant filed return within three months from 01.07.2017
as per Finance Act.
Whether amount is admissible as input tax credit under GST.
S. No. 8
 S. No. 8 - What to check

Checks by Dept –
Whether ISD registrant filed return within three months from 01.07.2017
as per Finance Act.
Whether amount is admissible as input tax credit under GST.
 S. No. 9
What to enter: goods sent for Job-work before 01.07.2017 and
not received back on 01.07.2017
Section 141 – Inputs/ semi-finished goods cleared for job-work/
goods received by job-worker or
goods manufactured and cleared for carrying out tests or
any other process not amounting to manufacture and not received/
returned back before 01.07.2017.
Both principal and
Jobworker
To enter details of pending goods.
S. No. 9 (a) and 9 (b)
 S. No. 9 - What o check

Checks by Dept –
Whether job worker received inputs for job-work / other purposes prior
to 01.07.2017 and the same were returned after 01.07.2017.
Whether semi finished goods were removed prior to 01.07.2017 and
returned back after 01.07.2017 after manufacturing process.
Whether manufactured goods cleared for tests or other processes before
01.07.2017 and returned back on or after 01.07.2017.
whether in all the above cases, the goods were returned within 6
months.
 S. No. 10 – Goods held in stock on behalf of principal
under Section 142(14) of SGST Act.

What registered person to enter –

Details of goods or capital goods belonging to principal lying at Agent’s
premises on 01.07.2017 –
eligible to take credit tax paid on such goods or capital goods.
S. No. 10 (a) and 10 (b)
 S. No. 10 – Goods held in stock on behalf of principal
under Section 142(14) of SGST Act.

What to check –
Both principal and agent declare details of stock of goods or capital goods
lying as on 30.06.2017
Invoices were issued not earlier than 30.06.2016
Principal reversed ITC to the extent availed by him / not availed ITC
 S. No. 11 Section 142 11 (c)

What registered person to enter –

S. No. 11 (c) – When tax was already paid on any supply both under
VAT & Finance Act - entitled to take credit of VAT/ Service Tax paid to the
extent of supplies made after 01.07.2017.
S. No. 11
 S. No. 11 Section 142 11 (c)

What to check – Correctness of transitional credit entitlement – to

correlate with details contained in Taxable Invoices issued for supplies after
01.07.2017.
 S. No. 12 142(12)

S. No. 12 – Details of goods sent on approval basis between 01.01.2017

to 30.06.2017 .
S. No. 11
 S. No. 12 142(12)

What to check –
Whether such goods are rejected/ not approved by buyer and hence
within 31.12.2017
Whether same are returned after 01.01.2018, Whether the applicable GST
was paid by the person returning them.
If goods are not returned by recipient on or after 01.012018, Whether the
person who sent goods (here registered person who filed the declaration)
paid applicable GST or not.
Thank You.