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Transfer of GST Input Tax Credit


Transfer of GST Input Tax Credit

Transfer of GST Input Tax Credit (ITC) shall apply to all the taxpayers registered under VAR, service tax or central excise to migrate to GST. The taxpayer can transfer the ITC from the Electronic Cash Ledger. In this article, we look at the process of transferring input tax credit in service tax or VAT or Central Excise to GST in detail.

Transitional Provisions – TRAN-1

The GST Act provides the procedure for transferring existing input tax credit to GST in the Transitional Provisions rules of GST. In accordance with the provisions, all taxpayers registered for GST can file GSTR TRAN-1 to avail the input tax credit. To transfer the input credit tax, the taxpayer shall submit the following details in TRAN-1. The taxpayer should file Form TRAN-1 only on the GST Portal.

  • The amount of tax or duty availed or utilized by way of input tax credit under each of the existing laws till the appointed day;
  • The amount of tax or duty yet to be availed or utilized by way of input tax credit under each of the existing laws till the appointed day;
  • Details of stock held on the appointed day;
  • In the case of a claim under sub-section (5) of section 140, furnish the following details, namely:
    • The name of the supplier, serial number and date of issue of the invoice by the supplier or any document on the basis of which credit of input tax was admissible under the existing law;
    • The description and value of the goods or services;
    • The quantity in case of goods and the unit or unit quantity code thereof;
    • The amount of eligible taxes and duties or, as the case may be, the value-added tax [or entry tax] charged by the supplier in respect of the goods or services; and
    • The date on which the receipt of goods or service entered in the books of account of the recipient.

Click here to read on FAQs on Transitional Provisions

Due Date for Filing GST TRAN-1

GST Tran 1 must be filed in the GST Common Portal for transferring any input tax under earlier tax laws to the GST input tax. The due date for filing GST TRAN-1 has been extended upto 30th November 2017 to help taxpayers complete the necessary formalities. After the conclusion of filing of GST TRAN 1 and after confirmation, the total amount of credit in the submission of the FORM TRAN-1 will be credited to the electronic credit ledger of the taxpayer and recorded in FORM GST PMT-2.

Transitional Provisions – TRAN-2

If the concerned individual does not have service tax, VAT or central excise registration, there exists a scheme for claiming input tax credit on goods held in stock on July 1st if the taxpayer do not have possession of any document evidencing payment of central excise duty.

For such goods, the GST Council allows the input tax credit at the rate of 60% on goods which attract central tax at the rate of 9% or more and 40% for other goods after the central tax payable on such supply paid the individual. The concerned individual can avail this scheme for six months from 1st July 2017.

To claim input tax credit under this scheme, the following conditions must be satisfied

  1. The goods were not unconditionally exempt or nil rated from excise duty.
  2. The document for procurement of such goods is available with the taxpayer.
  3. The taxpayer files TRAN-2 for 6 months during which time the scheme is in operation.
  4. The stock of goods on which the credit is availed is stored in a manner that it can be easily identified by the taxpayer.


According to the GST Transitional provisions, those who have registered with reference to GST and permitted to take input tax credit are obligatory to put forward GST TRAN-1 in GST Common portal in 90 days from the day of GST implementation. It is based on recommendations of GST Council, the period for transferring existing input tax credit of 90 days has been extended by an additional 90 days. Approximately 80 lakhs businesses have migrated to GST and all the current taxpayers who are paying service tax or central excise or VAT are obligatory to obtain their GST registration and finish the procedure of migration.

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