TRAN-1 and TRAN-2, Format and Due Date – Transition of Old Input Tax Credits (ITCs) To GST Regime

A predominant challenge for businesses registered underneath GST is to make certain they don’t lose out on the tax advantages and input credits of the old regime. These taxes may also be paid whilst purchasing, inputs, raw materials, semi-finished goods, completed goods, or on materials sent to job worker. For most organizations those taxes are to be had as an input credit on 30th July and shifting these to the GST regime is critical to take benefit of them. The CBEC has launched transition guidelines and codecs and with the assistance of these, agencies can move credit of old input credits to GST. With the implementation and rollout of GST, taxpayers are concerned as to what will happen to the taxes paid in the pre-GST regime. There may be several questions, such as what form is needed in order to avail input credit? The entire credit of taxes paid in the previous tax regime could be allowed or not? How to claim input credit in Form GSTR-3B? What is the due date of Forms TRAN-1 and TRAN-2?

Therefore, to facilitate the seamless transfer of ITC under the GST regime for the existing physical stocks which has already suffered the occurrence of taxes below specific existing legal guidelines and are still mendacity with the registered sellers as on appointed date, Transitional Provisions were included in GST Act, 2017. Section 140 to 142 of GST Act, 2017 and rules made there in particular, deals with the provisions of input tax credit to be carried forward to the reformed GST regime.

If you wish to claim the credit score of taxes paid for the final stock, you may want to file Forms TRAN-1 and TRAN-2, which can be prescribed under the GST regime within 90 days from the appointed date. Registration under the GST regime is mandatory for availing the ITC whether it was previously registered or not.

An Overview of TRAN-1 and TRAN-2 Forms Under GST

CBEC has released TRAN-1 and TRAN-2 paperwork to make agencies transition easily and carry forward their input tax credit. The GST TRAN-1 and TRAN-2 paperwork can be filed by way of the registered enterprise owner under GST who had been already registered under the old legal guidelines of taxation. Amongst many issues for business entities after the implementation of GST, one is related to the provision of Input Tax Credit (ITC) on old stock. Most of these corporations, who still own an old inventory of supplies, had already paid taxes such as Value Added Tax (VAT) and/or Service Tax under the previous tax regime at the purchases of raw substances and different goods/commodities.

Now, they are seeking to carry over the input credit while transitioning to the reformed GST regime. So, to place their minds to ease, the government is allowing such groups to assert and carry forward their eligible credits from the previous tax regime to GST. However, there is a time restriction on the claims of such credit and there are certain conditions that companies need to meet to be eligible for the claim.

There are essentially two kinds of transitional credits. These are:

(a) Tax paid at the capital inventory or old stock (closing stability of CENVAT). This can be claimed in the form of ITC under GST regime.

(b) Unavailed ITC on final inventory from the previous tax regime. This might be carried forward to GST for certain business entities.

Format of Forms TRAN-1 and TRAN-2

Due Date for Submitting Forms TRAN-1 and TRAN-2

The final date for filing Tran-1 and Tran-2 forms in order to claim the input credits of tax paid on an old stock is stated as under:

  • Businesses who desire to discharge tax liability for the month of July through transitional credit (of old stock) are required to apply on or before 28th August.
  • Businesses that are eligible for transitional ITC through TRAN-1 must apply on or before 31st December.
  • Those eligible for transitional ITC through TRAN-2 can follow month-to-month on or earlier than 30th June.

Eligibility Criteria for Claiming ITC on Old Stock

Any business, whether registered or no longer registered under the previous taxation regime, having old stock, can declare the input credit for already paid tax, given that they observe the conditions as mentioned below.

  • Businesses that are already registered under the previous tax regime having old stock are eligible.
  • A business that are registered under VAT and having paid Excise duty on the last inventory as of 30th June 2017.
  • Businesses that were not registered previously, however, registered under GST and having an old stock with tax paid.
  • Those manufacturing/promoting GST exempted goods that have been taxable in the preceding tax regime and feature already paid tax on their old stock.
  • Those, who have been composition sellers in the sooner regime but no longer under GST, can declare input credit on their capital inventory as of 30th June 2017.
  • A business is required to have filed the last six-monthly returns under older laws prior to GST.
  • The old stock objects currently under the manufacturing or task paintings process, also are eligible.
  • Businesses not having availed input tax credit (ITC) on capital items (from the previous tax regime) can declare to transfer the same to the GST regime.
  • Businesses that are registering or registered under the Composition Scheme of GST are not eligible.

How to Claim ITC on Old Stock

The CBEC has implemented transition forms, which are TRAN-1 and TRAN-2, respectively, in order to assist businesses transition to the new tax regime easily and carry forward the ITC from the previous taxation system.

(a) TRAN-1: To be used by registered people (registered or no longer registered under old regime) under GST.

  • As in keeping with Section 140, every registered man or woman under GST regime (however no longer a composite dealer) ought to put up a statement electronically in FORM GST TRAN-1, if they are entitled to claim ITC of stock as on 30th June 2017.
  • Form TRAN-1 may be filed by persons who are registered under GST and wishes to claim ITC on stock, whether he/she was registered or no longer registered under the old tax regime i.e., VAT Act, Central Excise Act, Service Tax Act, is immaterial.
  • It needs to be duly signed and filed on the GSTN common portal mentioning the amount of ITC to which they may be entitled under the provisions.
  • This statement is required to be made no later than 90 days from the appointed day i.e., till 30th September 2017.
  • The amount of credit specified within the announcement in FORM GST TRAN-1 shall be credited to the electronic credit ledger of the applicant maintained in FORM GST PMT-2 at the GSTN common portal.
  • Form TRAN-1 is just not most effective for availing credit of ITC on stock, it is to be filed also whilst a registered person has bought capital items and became unable to claim the full amount of tax paid throughout the purchase, the remaining amount can be claimed under GST.
  • Form TRAN-1 had been possibly made available on the GSTN common portal since 21st August 2017.

(b) TRAN-2: To be utilized by registered people under GST but not registered under previous tax regime or persons that do not have the documents/bills/evidence of duty paid on old stock.

  • All taxpayers registered under the GST regime that fulfils all the conditions that are mentioned underneath must file Form GST TRAN-2.
  • Such persons must not be registered under the old taxation regime i.e., the pre-GST regime.
  • Should possess final stock on 30th June 2017.
  • Should neither be a manufacturer under the Central Excise Act nor a dealer of services under the Service Tax Act.
  • Should not be in ownership of any invoice or any other document as proof of the charge of taxes.
  • Form TRAN-2 should be filed monthly from July 2017 to December 2017.

Step-by-Step Procedure for Filing Forms TRAN-1 and TRAN-2 To Claim Input Tax Credit (ITC) Under GST Regime

Any person who wishes to claim ITC at the tax paid on their old inventory is required to file Form GST TRAN-1 and promote the old stock within 6 months from 1st Jul 2017.

How to file Form TRAN-1 under GST

Follow the steps given below:


  1. Visit the GSTN common portal and sign in to your GST account.
  1. Select Services, then click Returns and click again on Transition Forms.
  1. Choose ‘Yes’ or ‘No’ for whether you have efficiently filed the previous six-monthly returns under old tax laws earlier than the launch of GST. The TRAN-1 form will open with specific alternatives which are primarily based on your selection.
  1. Fill up all the necessary information in every field of each table and click on the Save button at the bottom. The system will show if there’s any validation error, otherwise, your form could be saved.
  • First, input your details such as GSTIN, legal name, trade name, etc. and then click Save.
  • Furnish the details of input credit to be carried forward to GST:
  • Amount of Cenvat credit carried forward to the e-credit ledger as CGST.
  • Details of statutory forms received for which credit is being carried forward.
  • Amount of tax credit carried forward to the e-credit ledger as State/UT tax (SGST/UTGST).
  • Enter information of capital items for which credit has not been availed under preceding laws and is eligible to be carried forward to GST.
  • Amount of unavailed Cenvat credit (with regard to capital items) carried forward to e-credit ledger as CGST.
  • Amount of unavailed ITC carried ahead to e-credit ledger as SGST/UTGST.
  • Enter the information of the inputs held in stock to avail the credit of already paid taxes and duties under previous laws and eligible under the GST regime.
  • Amount of duties and taxes on inputs claimed as a credit.
  • Amount of VAT and Entry Tax paid on inputs supported by invoices/medical doctors evidencing charge of tax carried forward to credit ledger as SGST/UTGST.
  • The stock of products that are no longer supported via invoices/evidence of price of tax (only for States having VAT at a single point).
  • Enter the information of the transfer of Cenvat credit for the registered person having centralized registration under the previous legal guidelines.
  • Details of goods sent to a job worker and held in his/her stock on behalf of the principal (by way of each job worker and the important business).
  • Details of goods despatched as being most important.
  • Details of goods held in stock as job worker.
  • Details of goods/commodities that are held in inventory by means of sellers on behalf of the actual proprietor and are eligible ITC.
  • Details of goods held as agent on behalf of the principal.
  • Details of goods held by using the agent.
  • Details of transition credit availed on transactions on which tax (both service tax and VAT) has been paid under previous laws and are also relevant under the GST regime.
  • Details of goods/commodities that are despatched on the basis of approval six months prior to the appointed day.
  1. Click on the Submit button to save the information and submit Form TRAN-1. The form as soon as submitted cannot be modified, so make sure to enter accurate information and validate before submitting.

Note: Once the TRAN-1 form is submitted correctly, the transition credit claimed could be published to the e-credit ledger of the applicant. However, the credit can be used only after the filing of TRAN-1 with the aid of digitally signing it.

  1. Click the File button via DSC or EVC. A message will be generated upon successful filing. You can also download the acknowledgement for the same.

Important Things to Remember

There are, of course, few things to remember.

  • The ITC you wish to carry forward from the previous tax regime must additionally be eligible under the reformed GST regime.
  • The input credit from the previous tax regime can be transferred to GST provided that the person has filed his/her past six-monthly returns under the previous tax system without any skip.
  • Credits of any central taxes consisting of excise duty and service tax will be dealt with as CGST.
  • Credits of State taxes such as VAT will be dealt with as SGST.
  • ITC claimed on an old stock can be used to pay the output tax legal liability of GSTR-3B and/or next GST returns.

Things to Know When Filing Form TRAN-2

Form TRAN-2 may be filed by a dealer or trader who is registered under GST, but was unregistered under the previous tax regime. Such a dealer or trader who does not have a VAT or excise bill for stocks held by them on 30th June 2017, can use TRAN-2 to assert tax credit on the stock with them. A manufacturer or service issuer, however, cannot file Form GST TRAN-2.

Form TRAN-2 needs to be filed by means of a trader or dealer, usually at the end of each month, when stock is sold reporting the details to claim the input tax credit. He/she should meet the conditions given as under:

  • Such items were not unconditionally exempt fully from excise/VAT or goods which were no longer rated ‘Nil’ under Excise/VAT.
  • This scheme is operative only for six months from the 1st of July 2017. This means that the stock should be cleared through the end of December to claim the input credit.
  • You have a document that suggests procurement of such items.
  • The stock of goods/commodities on which the input credit is being claimed is saved such that it can be effortlessly identified.

Information to be Entered in Form TRAN-2

Given below are details which needs to be furnished in Form TRAN-2.

  • GSTIN: Enter your GSTIN (Goods and Services Tax Identification Number).
  • Name of Taxable Person: Enter name here.
  • Tax period: Enter the month and year for which this form is being filed.
  • Details of inputs held on stock on 1st July for which you do not have any invoice/document evidencing payment of tax carried forward to electronic credit ledger.

Stock held without a supporting document displaying payment of Excise Duty (Central Tax).

If you do not have a document showing the payment of Excise Duty, then you are required to fill the subsequent details stated as under:

Here you must supply details of the Stock in the following manner:

  • In column 1, the HSN code of the opening stock for the month.
  • In column 2, the unit of measurement of the opening stock for the month.
  • In column 3, the quantity of opening stock for the month.
  • In column 4, the number of goods sold within the month.
  • In column 5, the taxable price of goods sold for the month.
  • In column 6, if sold intra-state, then mention CGST.
  • In column 7, if goods sold are sold inter-state, then the quantity of IGST paid has to be entered.
  • In column 8, credit of central tax (input credit of CGST) claimed shall be:
  • If the CGST paid in column 6 is 9% or more, then the ITC to be claimed is 60% of column 6. If not then it is 40% of column 6.
  • If the IGST paid in column 7 is 18% or more, then the ITC to be claimed is 30% of column 7. If not, then it is 20% of column 7.
  • In column 9, the amount of opening stock for the relevant tax duration calculated with the aid of deducting cost in column 4 from price in column 3 (i.e., column 4 minus column 3).

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