In our earlier blog How to File Form GST TRAN-1: Part I, we discussed about filing GST TRAN-1 with details of CENVAT and input VAT credit carried forward. In this blog, we will discuss about how to file Form GST TRAN-1 for claiming transitional ITC on Capital goods.
In the earlier regime of indirect tax, there were various conditions and restrictions for availing ITC on capital goods. For example, under Central Excise, a manufacturer can avail ITC up to 50 % in the current year and remaining in the subsequent year. Similarly, under VAT, each state had different provisions for claiming input vat on capital goods. As a result, on the date of transitioning to GST, businesses who have unavailed input tax credit on capital goods will be allowed to carry forward the unavailed portion as transitional ITC to GST.
To be eligible to carry forward such credit, the businesses need to meet the following conditions:
- CENVAT and input VAT are allowed as input tax credit in earlier regime
- It is admissible as input tax credit under GST
To know more on this, you can refer ‘Scenario 2: Unavailed CENVAT credit and Input VAT on capital goods’ in our blog Moving to GST: For Registered Businesses.
Once you are eligible, the details of unavailed tax credit on capital goods needs to be captured in table no. 6 of Form GST TRAN-1.
As shown above, table no 6 in Form GST TRAN-1 is further categorized into table 6(a) for capturing details Cenvat credit and table 6(b) for capturing the details of Input VAT credit (including Entry tax).
Let us discuss these tables of Form GST TRAN-1 in detail
Table 6(a) – Details of unavailed Cenvat credit of capital goods
In the above table, you need to capture invoice-wise details of unavailed cenvat credit. The following details need to be captured:
- You need to provide invoice no., invoice date, along with the ECC No. (Excise registration number) of your business and your supplier.
- Provide the break-up of taxable value of capital goods and duties such as Excise Duty, CVD (If capital goods are imported) and SAD (additional import duty) paid on capital goods.
- Out of duties and taxes paid, you need to capture the eligible Cenvat credit on capital goods in column no. 9 and the amount of cenvat credit already availed by you prior to 1st July,2017 in column no. 10
- The differential amount of cenvat credit in column 10 minus (-) credit already availed in column 11 will be the transitional credit allowed to be carried forward.
Table 6(b) – Details of Input Vat credit of capital goods
In the above table, you need to capture the unavailed Input vat, including entry tax on capital goods. The details required to be furnished for the above table 6(b) are similar to details furnished in table no 6(a).
Steps to File Form GST TRAN-1 with above details in GST portal
- Login to GST Portal and navigate to Servicesà Returns àTransitions forms
- Click on Table 6 of Form GST Tran-1
- Central Tax and State/UT Tax Menu will open.
- Select the relevant tax head and click ‘Add details’ option available at the bottom of the page. On clicking the add details, the table details as discussed will be available as shown below:
Details of unavailed Cenvat credit of capital goods as per table 6(a) of Form GST TRAN-1
(Note: – Values in all the boxes are to be entered manually, only the last column ‘Total CENVAT credit unavailed under existing law’, will be auto calculated based on the values provided above)
As shown above, you need to give the invoice details along with the supplier registration number and your excise registration. Based on the amount provided in the eligible cenvat credit and amount of credit already availed, the total CENVAT credit unavailed will be auto calculated. In the above image, eligible credit was Rs.25,000 and already availed credit is Rs. 12,500. The difference of Rs.12,500 will be auto calculated and captured in ‘Total CENVAT credit unavailed under existing law’ field.
Details of unavailed Input VAT credit including Entry tax of capital goods as per table 6(B) of Form GST TRAN-1
(Note: – Values in all the boxes are to be entered manually, only the last column ‘Total VAT [and Entry Tax] credit unavailed under existing law (admissible as ITC of State/UT tax)’, will be auto calculated based on the values provided above)
The details need to be captured in a similar manner as the cenvat details explained above. The total VAT credit unavailed under existing law will be auto calculated based on the eligible credit amount and credit already availed. In the image, eligible credit was Rs.14.500 and already availed credit is Rs.4,500. The difference of Rs.10,000 will be auto calculated.
To download the Form GST TRAN-1 format, please click here
In our upcoming blogs, we will be discuss on filing Form GST TRAN-1 with the details of tax credit on closing stock.