GST TRAN-1 Form warrants details of only few out of all pending C Forms

By RS Sharma Advocate

GST TRAN-1 requires the declaration of pending C Forms/ F Forms and H Forms but all pending Forms and tax involved are not required to be declared in TRAN-1 Form.

Section 140( 1) of State GST Acts, 2017 which is a Transitional arrangement for input tax credit provides as under:

(1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the amount of Value Added Tax, and Entry Tax, if any, carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed:

Second Proviso to Section 140(1) of SGST Acts provides as under:

Provided further that so much of the said credit as is attributable to any claim related to section 3, sub-section (3) of section 5, section 6, section 6A or sub-section (8) of section 8of the Central Sales Tax Act, 1956 which is not substantiated in the manner, and within the period, prescribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 shall not be eligible to be credited to the electronic credit ledger

Serial No. 5 ( c) of GST TRAN-1 Form requires the figures of Turnover and differential tax payable thereon to be indicated. Further, the figures of tax payable on account of pending Forms is required to be reduced from the Closing Balance of VAT as per last return and such amount is not allowed to be carried forward as Opening Balance of SGST Credit.

TRAN 1 refers to rule 117(1), 118,119,120 of State GST Rules. Rule 117 of State GST Rules provides 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 to which he is entitled under the provisions of the said section:

Provided that the Commissioner may, on the recommendations of the Council, extend the period of ninety days by a further period not exceeding ninety days.

Provided that in the case of a claim under sub-section (1) of section 140, the application shall specify separately—

(i) the value of claims under section 3, sub-section (3) of section 5, sections 6 and 6Aand sub-section (8) of section 8 of the Central Sales Tax Act, 1956 made by the applicant; and

(ii) the serial number and value of declarations in Forms C or F and certificates in Forms E or H or Form I specified in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957 submitted by the applicant in support of the claims referred to in sub-clause (i);

The aforesaid Sections apply in cases when sale or purchase of goods takes place in the course of inter-State trade or commerce or stock transfer of goods or export.

What is mandated by the statutory provision under Section 140(1) of the State GST Acts; is that the Credit of Closing Balance of VAT return which is proposed to be credited in GST Electronic register should not be attributable to clearances made under C Forms/F Forms/H Forms. For example; if goods were purchased on payment of State VAT amounting to Rs. 1 Lakh and the Credit of State VAT was availed on purchase. Thereafter, the goods were transferred as stock transfer outside the State without payment/reversal of State VAT. In such case the details of credit attributable to such stock transfer will be required to be given and such credit cannot be carried forward in GST.

However, in those cases where input credit of State VAT was not taken at all and the goods were transferred outside the State without payment of State VAT under Forms; in such case there is no legal requirement to declare the details of pending Forms in GST TRAN-1 as the Credit which is being taken is not attributable to goods cleared under said Forms. Due diligence of TRAN-1 Form is must before filing as giving details of all pending C Forms, F Forms & H Forms can be suicidal as it will result in a situation that credit which was legally admissible can be lost in transition due to poorly drafted language of TRAN-1 which is misleading and suggests that details of all pending Forms should be indicated.

The language of TRAN-1 cannot bypass the statutory provision of Section 140(1) of State GST Acts; which will prevail in case of litigation as the intent of legislature is to disallow carry forward of VAT Credit into SGST Credit only in special situations. Litigation is going to start under GST in Transition itself as TRAN-1 Form itself is contrary to statutory provision. While filling the details of pending C/H/F Forms in GST TRAN-1 it has become a choice between the devil and the deep sea for Tax payers.

(Writer is Managing Partner of Law Firm RS Sharma Associates based in Gurgaon. He is advising several MNCs and Indian Corporates on GST issues. He can be mailed at )


  1. Anonymous said,

    August 14, 2017 at 9:31 am

    Nice article Sharma Ji, Keep it up ! I agree with you.

  2. Anonymous said,

    December 6, 2017 at 3:51 pm

    very good article

  3. raj kumar shukla said,

    March 16, 2018 at 4:12 pm

    very good effort sir

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