Basics of GST : Transferring Input Tax Credit in GST

Input credit is explained by the buzz stand team. It is a part of the basics of gst filing series by the buzz stand

This article is a part of the basics of GST series by The Buzz Stand where we are trying to educate people about this new GST tax.  The series covers articles from GST registration, GST filing, people who would come under this and various other topics which would help make the audience aware.

Almost 80 lakhs businesses have migrated to GST, in anticipation that 1st July 2017 will be the roll out date. All the existing taxpayers who are paying service tax or Central Excise or VAT are required to get their GST registration and complete the process of migration. Here we have all the information about how taxpayers can directly get their input tax credit which they have in their accounts of central excise, service tax or VAT in the new GST account.

Transferring Input Tax Credit in GST

Process for transferring existing input tax credit in GST has been approved in the Transitional Provisions rules of GST. According to the  provision , everyone who has registered under GST will have to take input tax credit as required for GST filling in  TRAN-1 before 90 days of implementation of GST as said on the portal. For the purpose of easing out the pain of migration, rules allow the commissioner, by recommendations of Council to grant extension of 90 more days after the 90 days period is completed.

Form  Tran -1 

GST Tran 1 should be filed in the GST Common Portal for the purpose of transferring any current input tax to the GST input tax. After completion of filing of application and after verification, total amount of credit told in the application of the FORM  TRAN-1 will be credited to the electronic credit ledger of taxpayer which is maintained in the FORM GST PMT 2 located on the online  portal.

GST Tran -1 Filing Procedure

Tran -1 Filing can be completed in the following way:

  • For products of capital goods
    • Total amount of duty or tax utilized or availed in input tax credit inside each of the current laws till the time appointed day
    • Every duty or tax which has to be utilized or availed by input tax credit inside each of the current laws till the time of appointment.
  • For Stock Held
    • Name of the supplier, date and serial number in the invoice provided by the supplier or any other document from the basis of which input and credit tax was calculated under current law.
    • Quantity in case of items or units or unit quantity code.
    • Value and description of services and goods.
    • Amount of tax which is eligible or duties, or VAT charger by supplier if compared with the services and goods
    • Date at which the receipt of services and goods is entered inside the book of accounts

Final Declaration

All the tax payers who are going to migrate  will have to submit the declaration in the Form  TRAN 1, furnishing the proportion of supply at which VAT or Service Tax is paid before the implementation of GST tax but if the supply is made after the GST tax implementation date.

To read more from our basics of GST series please click here. In case you need any help on GST filing  or GST registration please fill the form here. Our team would get in touch with you.




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