1. TRANSITIONAL PROVISIONS
V. Raghuraman

2. TRANSITIONAL PROVISIONS
Transitional provisions under model GST law could be broadly categorised as below:
Registration and migration to the new law
Input tax credit
Refunds pending or to be filed under existing law
Adjudications or appeal under the existing law
Miscellaneous other issues

3. Registration

4. Registered under VAT/ST/Excise provisions
Existing law
GST laws
Registered under VAT/ST/Excise provisions
Provisional registration under GST law (if taxable)
Final certificate on fulfillment of conditions
If not liable to get registered under GST, it is deemed as no provisional ID is issued`

5. Input Tax

6. VAT credit on inputs / Capital goods
VAT Dealer
Service Provider
VAT+ST registered
Manufacturer
Input services
VAT credit on inputs / Capital goods
CEX duty on inputs / Capital goods
Accumulated Credit | Balance Credit on Cap Goods| goods in Stock |
Invoices / goods received after appointed date

7. Section 140(1)-Accumulated credit
Applicable to
Person registered under GST provisions (other than opting for Composition scheme)
Such person should be registered under existing provisions
Amount of credit
Amount of credit carried forward in last return filed by such person prior to appointed date
Conditions
Should have filed all returns under existing laws for 6 months prior to appointed date
such credit is also admissible under the GST Act.
said amount of credit does not relates to goods manufactured and cleared under such exemption notifications as are notified by the Government
Registered person opting for composition scheme under GST cannot avail this benefit
Also refer 18(1) of UTGST Act2017

8. Section 140(1)-Procedure- [Rule 117]
Submit Form GSTRN-1 – electronically- on common portal
Within 90 days from appointed date
specifying details of credit
GST TRAN-1
No restriction on nature of duties / taxes

9. Section 140(2)-unavailed credit on Cap goods
Applicable to
Person registered under GST provisions and
Such person should be registered under existing provisions
Amount of credit
Unavailed portion of credit on capital goods
Not carried forward in return
Unavailed = Credit on Cap Goods entitled (-)Credit already availed under existing law
Conditions
Such credit is admissible as credit under existing law
Such credit is also admissible under the GST Act.
Procedure
Details in FORM GSTN-1 within 90 days
Details of credit entitled, already availed/utilised, balance availed under this provision for each of the capital goods to be submitted
Also refer 18(2) of UTGST Act 2017

10. Who was not liable to be registered under the existing law or
Section 140(3) - Credit on goods in stock as on the appointed date
Applicability:
A registered taxable person (under GST),
Who was not liable to be registered under the existing law or
Who was engaged in the manufacture of exempted goods or provision of exempted services under the earlier law,
Providing works contract services and was availing of the benefit of Notification No. 26/2012-Service Tax, dated
First/Second stage dealer or registered importer
Depot of a manufacturer
Entitlement:
Credit of eligible duties and taxes in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day.

11. Eligible for credit under GST Act;
Section 140(3) - Credit on goods in stock as on the appointed date
Conditions:
Such stock is used intended to be used for making taxable supplies;
Eligible for credit under GST Act;
(iii) In possession of invoice and/or other prescribed duty paid document;
(iv) Such duty paid documents was not issued beyond 12 months from appointed date; [bills shall be dated ]
(v) the supplier of services is not eligible for any abatement under the Act
Similar provisions under Section 18(3) of UTGST Act2017 to enable availment of credit of VAT and entry tax credit. This provision also covers the cases of credit on stock of goods which the second /subsequent sales were not liable to tax under VAT laws.
Duty paid documents not available?
Procedure to be prescribed – such procedure not applicable to Manufacturer or Service provider

12. Submit Form GSTRN-1 – electronically- on common portal
Section 140(3)- Procedure
Where duty paid documents are available
Submit Form GSTRN-1 – electronically- on common portal
To provide details of stock held on which credit is availed
So stock take is essential
Where duty paid documents are not available:
Credit of 60/40% of CGST paid on such stock sold would be allowed
Credit availment after payment of GST
Time period: 6 tax periods(months) from appointed date

13. Section 140(3)- Procedure -40% credit scheme
(i) Such goods were not wholly exempt from excise duty or NIL rated.
(ii) Document for procurement of such goods is available with the registered person.
Submit stock details in GST TRN -1 and also on monthly basis details of such goods supplied to be submitted
The amount of credit allowed shall be credited to the electronic credit ledger of the applicant maintained in FORM GST PMT-2 on the Common Portal.
(v) The stock of goods on which the credit is availed is so stored that it can be easily identified by the registered person

14. Similar provisions under Section 18(4) of UTGST Act 2017
Sections 140(4)- person having taxable as well as exempted activities
Manufacturer – manufacturing both dutiable as well as exempted
Service provider- providing both taxable as well as exempted services
Credit relating to taxable service/ dutiable goods- based on the final return [Section 140(1)]
Credit relating to exempted activities : to the extent of credit relating to stock [Section 140(3)]
Similar provisions under Section 18(4) of UTGST Act 2017
Procedure similar to 140(1) & 140(3)

15. Sections 140(5)- Inputs/ input services received on or after appointed day
Receipt of following after appointed date:
Inputs / input services
Duty / Tax was paid under existing law
Credit could be availed in GST
Condition:
Document is accounted within 30 days of appointed date (extendable)
To submit a statement in the form GST TRAN-1 within [90 days from appointed date]
Similar provisions under Section 18(5) of UTGST Act2017 to transfer the VAT and entry tax credit.

16. Section 140(6): Person paying tax under composition scheme / standard rate under present scheme
Person who was paying tax at fixed rate or paying fixed amount under existing law [composition / specific rate]
could take credit on goods in stock.
The conditions are as below:
Such stock is used intended to be used for making taxable supplies;
Eligible for credit under GST Act;
(iii) In possession of invoice and/or other prescribed duty paid document;
(iv) Such duty paid documents was not issued beyond 12 months from appointed date;
(v) the supplier has not opted for composition scheme under GST
Procedure: similar to 140(3)
NO 40/60% would be allowed

17. Section 140(7)- ISD
Input services received prior to appointed date by ISD
But invoices are received after appointed date
Would be eligible fore distribution under GST

18. Section 140(8)-Provision for transfer of unutilized Cenvat Credit by taxable person having centralized registration under the earlier law
Credit based on the return for period ending date prior to the appointed date subject following conditions:
Such person shall furnish returns for the period ending appointed date (under earlier laws) within three months from appointed date.
Such return shall be a original return;
If revised – credit has been reduced appropriately ;
The credit shall be an admissible credit under GST
Such credit may be transferred to any of the registered taxable persons having the same PAN for which the centralized registration was obtained under the earlier law.

19. Section 140(9)-Reversal of input service credit on account of non payment
Where credit on input service is reversed on account of non payment of consideration to service provider prior to appointed date
Payment made to vendor after appointed date
Credit could be availed if such payment is made within [3 months of appointed date]

20. Section 140-Explanation 1 - What are the “eligible duties and taxes” means-
the duty of excise
Additional Duties of Excise (Textile and Textile Articles) Act, 1978 (40 of 1978);
the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957(58 of 1957);
the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001(14 of 2001);
the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975 (51 of 1975);
the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975 (51 of 1975); and
in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day
the service tax leviable under section 66B of the Finance Act, 1994 (32 of 1994) [only for the purpose of Section 140(5)]

21. Section 141: Transitional provisions relating to Job work
Goods (Inputs, Semi finished goods and finished goods) removed for job work or other operations prior to appointed date:
Whether received back within 6 months from appointed date
NO GST shall be payable
Period of 6 months could be extended where sufficient cause is shown
If goods are not received back
Credit availed by the sender is recovered as arrears of tax and no credit shall be eligible
The finished goods may also be cleared directly from job workers premises on payment of GST or without GST for export or deemed export.
It shall be noted that to avail this benefit , inputs held by job worker on behalf of principle manufacturer shall have to be declared.
Goods with job worker as on – what happens?
In terms of the rule 119 both principal and agent shall declare stocks

22. Refund

23. Refund on account of exports When the claim is preferred
Transitional provisions relating to refund [142(3) & 142(4)]
Refund of duties paid
Refund on account of exports
When the claim is preferred
Either before or after or on the appointed date
To be processed
In terms of the provisions of existing law
If refund is eligible
Cash refund subject principles of unjust enrichment
Cash refund
No refund if
The balance of the said amount is carried forward in the return
If rejected (fully or partly)
Would lapse to the extent rejected
Similar provisions under Section 20(3) of UTGST Act 2017 relating to refund of input tax credit

24. Transitional provisions relating to refund of ST where no service is provided [142(5)]
Service tax paid
Prior to appointed date
Refund claimed
After appointed date
On account of
Non provision of services
To be processed
In terms of the provisions of existing law
If refund is eligible
Cash refund subject principles of unjust enrichment
If rejected (fully or partly) ??

25. ADJUDICATION & APPEALS

26. Proceedings initiated Prior to / on / after the appointed date
Transitional provisions Assessment, adjudication and appeals[Section142(6)-142(8)]
Input tax disputes
Out put tax disputes
Proceedings initiated
Prior to / on / after the appointed date
To be processed
In terms of the provisions of existing law
Input tax eligible /
Output tax not payable
Refund in cash subject to the principles of unjust enrichment
No refund if
The balance of the said amount is carried forward in the return
Input tax not eligible /
Output tax payable
Unless already recovered – to be recovered as arrears of GST
No credit of such tax is admissible under GST
Similar provisions under Section 20(5)- of UTGST Act 2017 relating to refund of input tax credit

27. Revision of return (under existing law) After the appointed date
Transitional provisions relating to amount s recovered or refunded pursuant to revision of returns [142(9)]
Revision of return (under existing law)
After the appointed date
Input tax -reduction/
Output tax – increase
Unless already recovered – to be recovered as arrears of GST
No credit of such tax is admissible under GST
Input tax -increase /
Output tax decrease
(if revised time limit)
Refund in cash subject to the principles of unjust enrichment
Similar provisions under Section 20(5)- of UTGST Act 2017 relating to refund of input tax credit

28. Miscellaneous other issues

29. Transitional provisions relating to - Goods returned to the place of business on or after the appointed day[Sec 142(1)]
Goods cleared
Under existing law(whether or not duty paid)
Applicable for clearances upto 6 months prior to appointed date
Returned back
On or after appointed date
If returned by a person not registered under GST
Within 6 months from appointed date
refund of duty/ tax (if any paid on the clearance)
Not within 6 months
GST to be paid by recipient
(original supplier)
If returned by a person registered under GST
Such return shall be deemed to be supply attracting GST
Similar provisions Similar provisions under Section 20(1) of UTGST Act2017

30. Transitional provisions relating to - Price revision after appointed date[Section 142(2) ]
Contract
was entered prior to appointed date
Supply of goods or service or both
Prior to appointed date
Price revision
After appointed date
Upward price revision
Issue supplementary invoice within 30days of such price revision and shall be treated as suppl. invoice relating taxable GST supply
Downward revision:
Issue credit note within 30days of such price revision and shall be treated as credit note relating taxable GST supply. Reduction in tax liability would be allowed only where buyer has reduced his credit

31. Section 142(10) Treatment of long term construction / works contracts
The goods and/or services supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act.

32. Avoidance of double taxation on account of time of supply [Section 142(11)
Supply of goods and/or services
Made on or after the appointed day
Notwithstanding
Time of supply under GST
Where
ST / VAT is already paid
To that extent of payment
NO GST is payable
In case where both VAT and ST paid (composite contracts)
GST would be leviable and VAT and ST already paid would be eligible as credit
In terms of rule 118 submit declaration in From GST TRAN- 1 within 90 days

33. Transitional provisions relating to - Goods sent on approval basis returned on or after the appointed Day [Sec 142(12)]
Goods sent on approval basis
Under existing law(whether or not duty paid)
Applicable for clearances upto 6 months prior to appointed date
Returned back to the seller
On or after appointed date
If returned
Within 6 months from appointed date (period extendable)
NO GST
Not within 6 months
GST to be paid (if taxable) by person returning as well as person supplied

34. Tax deduction at source[Section 142(13)
Sale of goods in respect of which tax was required to be deducted at source under the earlier law
Prior to appointed date
Invoice is also issued
Payment for such sale
After the appointed date
No TDS to be made under GST

35. Transitional provisions under IGST law [21 of IGST law]
Notwithstanding the provisions relating to time of supply [section 12 and 13 of the CGST Act, 2016] import of services made after the appointed day shall be liable to tax under the provisions of IGST law regardless of whether the transactions for such import of services had been initiated before the appointed day. If however tax is paid under earlier law, balance amount of tax is payable under this act.

36. Transitional provisions under IGST law [21 of IGST law]
Import of service after appointed date
Would attract levy of IGST irrespective of the fact that the initiated before the appointed day
If ST is fully paid
NO IGST shall be payable
If partly paid
No IGST would be payable to that extent
For the purposes of this section, a transaction shall be deemed to have been initiated before the appointed day if either the invoice relating to such supply or payment, either in full or in part, has been received or made before the appointed day

37. B.Com, FCA, LLB, ACS, Grad.CWA
Thank You
V. RAGHURAMAN, Advocate
B.Com, FCA, LLB, ACS, Grad.CWA
id :