E-mail TRAN1 to GSTN to claim Transitional Credit for July GST Payment

E-mail TRAN1 to GSTN to claim Transitional Credit for July GST Payment 

GSTN Webinar on GSTR3B on 9th August stated that Transitional Credit is not allowed to be credited in GSTR3B and hence cannot be used for payment of GST for the month of July as it would be allowed only after filing of TRAN-1 Form Online.  

Section 140 of CGST/SGST Acts provide that  Taxpayer is entitled to take, in his electronic credit ledger, closing balance of Central Excise, Service Tax & VAT carried forward in such returns in such manner may be prescribed.    

Rule 117 of CGST/SGST Rules prescribe the procedure as under: 

Tax or duty credit carried forward under any existing law or on goods held in stock on the appointed day.- (1) Every registered person entitled to take credit of input tax under section 140 shall, within ninety days of the appointed day, submit a declaration electronically in FORM GST TRAN-1, duly signed, on the common portal specifying therein, separately, the amount of input tax credit of eligible duties and taxes, as defined in Explanation 2 to section 140, to which he is entitled under the provisions of the said section. 

GSTN has not yet allowed  facility of Online Filing of TRAN-1. Non-provision of this facility has resulted in a situation that credit stands blocked and taxpayers will be required to pay GST for July  in cash in spite of having balance of credit in hand. 

According to RS Sharma Advocate the carry forward of Closing Balance under Central Excise, Service Tax & VAT Returns has already been allowed under GST Acts and when GSTN has failed to provide facility for Online Filing of TRAN-1; those Tax Payers who want to use Transitional Credit can email TRAN-1 to GSTN at their email id      helpdesk@gst.gov.in  asking GSTN to upload TRAN-1 at their end with cc to their Jurisdictional GST Officer prior to filing of GSTR3B and can indicate amount of Transitional Credit under “All Other ITC available” column in  GSTR3B as submission of TRAN-1 by email to GSTN will be deemed electronic submission of TRAN-1 on GSTN Portal when the GSTN has failed to provide Online Filing of TRAN-1 even after 42 days of launch of GST. The record of email should be preserved. When sufficient credit is admissible in hand on 1st July as opening balance of GST; the Tax Payers cannot be forced to pay GST in cash when GSTN has not done its job. The delay also raises question mark on competence of GSTN and its Software Vendors who have not been able to do their jobs as number of facilities such as Refund and other Applications have not yet been provided by them. For Refund also Tax payers can email Refund Claims in prescribed form to GSTN and Jurisdictional GST Authority and in case of delay in sanction of Refund; they can claim interest on delayed payment as the date of Refund Application by email will also be deemed the date of Online Filing of Refund Application by the Courts.

If GSTN does not put its house in order; it may see many Court cases against it as it has failed to perform its obligations in time and can be liable to pay compensation to taxpayers due to fault at its end, according to RSSharma Advocate who has already advised the clients to file Refund Claims by email so that interest and compensation on delayed refund may be claimed in Courts.