Key Points of Final GST Transition Rules – GST on Closing Stock on 30.06.2017

By | June 7, 2017
(Last Updated On: June 7, 2017)

Key Points of Final GST Transition Rules

Final GST Transition Rules and GST Transition Formats  are released by Govt of India , its salient features are as under:

1.Time : Persons entitled to take transition credit will have to submit a declaration within 90 days (upto 30th Sept) specifying the credit he wants to take on stocks lying with him on 30th June.

2.Form :  Declaration will have to be submitted in from GST Tran-1

3.Extension of Time : Commissioner can extend this timeline by another 90 days

4. Capital Goods : In case of capital goods whose part credit was availed in current period and part credit is to be availed under GST, he will have to submit the declaration specifying:

a. Amount of credit already availed in the current law

b. Amount of credit yet to be availed under the existing law and which he intends to avail under GST period

5. Excise Credit : Persons having excise invoices for stocks lying as on 30th June will be entitled to take full credit of excise mentioned in the invoices

6. Deemed Credit if Excise Invoice not available:

 Amount of GST Credit : Persons who do not have excise invoice, will be eligible to take credit in the following manner:

a. For goods taxable @ 18% or above – Credit shall be allowed at the rate of 60% of CGST payable on that goods – so if the rate is 18% then credit will be available @ 8.4% (60% of 9% CGST)

b. For goods other than above – Credit shall be allowed at the rate of 40% of CGST payable on that goods – so if the rate is 12% then credit will be available @ 2.4% (40% of 6% CGST)

Credit on Sale : Credit in the above Deemed Credit scheme will be available only once the said goods are sold and GST is paid. It’s like a cash back scheme.

Conditions : To take the credit in this scheme following conditions will have to be fulfilled:

a. such goods were not unconditionally exempt from excise

b. the document for procurement of such goods is available

c. the stock of goods on which the credit is availed is so stored that it can be easily identified by the registered person.

Period: Deemed credit scheme will go on for 6 months from GST date, so stocks lying as on 30th June have to be sold maximum upto 31st December, 2017. No credit will be available if these goods are sold after December 2017.

Return :  Separate return under for GST TRAN-2 will have to be filed.

7 VAT/ Service Tax Paid before GST but supply made afterwards : Every person to whom the provision of Section 142 (11) (c) applies, shall submit a declaration within 90 days of GST date in form GST TRAN-1 furnishing the proportion of supply on which VAT or service tax has been paid before the GST day but the supply is made after the GST day, and the ITC admissible thereon.

12.Job Worker : Every person to whom the provisions of Section 141 (Job worker) apply shall, within 90 days of the GST day, submit a declaration electronically in form GST TRAN-1, specifying therein, the stock held by him on the appointed day.

13. Goods sent on Approval : Every person having sent goods on approval under the existing law and to whom Section 142(12) applies shall, within 90 days of the appointed day, submit details of such goods sent on approval in form GST TRAN-1.

Also Read Draft Rule for issue of CTD – Credit Transfer Document to Transfer Cenvat Credit 

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