Transfer-Input-Tax-Credit-to-GST-ITC

Form GST ITC-02A

Form GST ITC-02A

Form GST ITC-02A is used, by the registered person having multiple business places within a State/ Union territory, for transferring Input Tax Credit from the transferor entity to the newly registered entity.

The present article helps to understand the provisions attached with the Form GST ITC-02A, steps to be followed by the transferor and the transferee for transferring the Input Tax Credit (from now on referred to as ITC).

Relevant provisions and Form GST ITC-02A

As per provisions of section 25 (2) of the Central Goods and Service Tax Act, 2017, a person having multiple places of business in a State/ Union territory may apply for and obtain separate registration for each place of business.

Further provisions of rule 41A of the Central Goods and Service Tax Rules, 2017 deal with the transfer of input tax credit at the time when the registered person has obtained separate registration for multiple places of business. Form GST ITC-02A is used for transferring such input tax credit.

For filing Form GST ITC-02A, the registered person is required to satisfy the following circumstances-

  • The registered person has a separate registration for multiple places of business within a State/ Union territory.
  • Such a registered person intends to transfer unutilized matched Input Tax Credit lying in the Electronic Credit Ledger of an existing (i.e., transferor) entity to the newly registered (i.e., transferee) entity.
  • For transferring such unutilized matched Input Tax Credit, the transferor entity is required to file Form GST ITC-02A within 30 days of obtaining the new registration (i.e., registration of the transferee entity).

Steps to be followed by the transferor entity

The transferor entity willing to transfer the ITC to the newly registered transferee entity should follow the below steps-

STEP 1 – Visit site https://www.gst.gov.in/ and click on the ‘Login’ icon on the right-hand side.

STEP 2 – Provide appropriate ‘Username’, ‘Password’, ‘Type the character shown’, and click LOGIN.

STEP 3 – Navigate the path Services > Returns > ITC Forms.

STEP 4 – Under GST ITC-02A, select TRANSFER ITC.

STEP 5 – Page containing ‘Declaration of transfer of ITC in case of obtaining separate registration in a State or Union territory’ would be displayed, enter the following details-

  • GSTIN of the Transferee.
  • Transferee Legal Name and Transferee Trade Name will be auto-populated.
  • Amount of matched ITC to be transferred.

STEP 6 – Click SAVE.

STEP 7 – After confirming the details, file the Form GST ITC-02A by either using EVC or using DSC.

It should be noted that once the Form GST ITC-02A is filed by the transferor, the amount of ITC to be transferred will be debited from the Electronic Credit Ledger of the transferor entity.

Steps to be followed by the transferee entity

Once the Form GST ITC-02A, for transferring the ITC, is filed by the transferor entity, auto-generated e-mail and SMS would be sent to the transferee entity. The transferee entity is required to either accept or reject the transfer by following the below steps-

STEP 1 – Visit site https://www.gst.gov.in/ and click on the ‘Login’ icon on the right-hand side.

STEP 2 – Provide appropriate ‘Username’, ‘Password’, ‘Type the character shown’, and click LOGIN.

STEP 3 – Navigate the path Services > Returns > ITC Forms.

STEP 4 – Under GST ITC-02A, select TAKE ACTION.

STEP 5 – List of all the pending ARN will be displayed. Select the appropriate ARN.

STEP 6 – Details of ITC to be transferred by the transferor entity will be displayed. Click on ACCEPT or REJECT button.

STEP 7 – Select the checkbox and file the details either using EVC or using DSC.

Some of the essential points to be noted by the transferee-

  • The amount of ITC cannot be altered/ modified by the transferee entity.
  • If the transferee entity clicks on the ACCEPT button, the ITC will be credited to the Electronic Credit Ledger of the transferee entity.
  • If the transferee entity clicks on the REJECT button, the ITC will be re-credited to the Electronic Credit Ledger of the transferor entity.
  • The action i.e., ACCEPT or REJECT, by the transferee would be intimated to the transferor via an e-mail and SMS.

Post by poonamgandhi

CA Poonam Gandhi is a Chartered Accountant and a Lawyer. With a wide practice experience and deep understanding of different laws and taxes, she has been an independent professional writer in the field of taxation, finance and laws.