Transitional Provision Act Rules LM 17052017

Transitional Provisions
K unal K r. Ghelani
10 June , 2017
18-05-2017 | 1
S139 - Migration of Existing Taxpayers
Migration is for
Every existing registered person
Having a PAN
Shall be issued a certificate of registration on provisional basis
Unless the provisional registration certificate is replaced by a final registration certificate it shall be liable to
be cancelled if the conditions so prescribed are not complied with
Provisional registration certificate shall be deemed to have not been issued if the said registration is cancelled in
pursuance of an application filed by a person that he was not liable to registration u/s 22 or u/s 24
Same provisions under SGST Acts*
*Rajasthan Gujarat, Telangana, UP, Punjab, Assam, Chhattisgarh

S140(1) - CENVAT Credit c/f in a Return
A registered person
Other than a person opting to pay tax under composition scheme
Shall be entitled to take credit of amount carried forward in his last return furnished under the existing law
Credit entitlement is subject to following conditions
1. Credit is admissible as input tax credit under CGST Act
2. Registered person has furnished all the returns required under the existing law for the period of six months
immediately preceding the appointed date
3. Credit does not relate to goods manufactured and cleared under existing exemption notifications
Same provisions under SGST Acts with a change in condition 3 that so much of credit that is attributable to
Inter-state sales (transit sales)
Penultimate sales for export
CST sales
Stock transfers
Sales to SEZ
for which relevant forms are not available shall not be eligible to be carried forward
S140(1) - CENVAT Credit c/f in a Return
If claims are evidenced by forms subsequently, the equivalent amount shall be refunded
The amount of credit to be carried forward in the electronic credit ledger
In case of multiple registration within a state, the amount of CENVAT credit will be merged
S140(2) - Unavailed CENVAT Credit on Capital Goods
A registered person
Other than a person opting to pay tax under composition scheme
Shall be entitled to credit of unavailed CENVAT credit in respect of capital goods that is not carried forward
in a return
1. The credit on such capital goods was admissible as CENVAT under the existing law
2. The credit is also admissible as input tax credit under CGST Act
Provision applies to capital goods procured in FY 2017-18 and credit of previous FYs when there is an
unavailed balance of CENVAT credit
Same provisions under SGST Acts
S140(3) - Credit of Inputs Held in Stock
A registered person
A. Not liable to be registered under the existing law
Eg. A manufacturer currently availing SSI exemption or a trader having diminimis turnover, but making sales
through e-commerce operators or a trader vis--vis central excise duty or a service provider vis--vis VAT or
supplies of goods which are currently taxed at the first point of sale and are then tax free but which will be
liable to tax under GST, or suppliers who are eligible for ITC only at the time of sale
B. Engaged wholly in the manufacture of exempted goods or provision of exempted services
C. Provider of works contract service and availing benefit of abatement under notification No. 26/2012-ST
D. First stage dealer
E. Second stage dealer
F. Registered importer
G. Depot of a manufacturer
shall be entitled to take credit of eligible duties in respect of inputs held in stock and inputs contained in semi-
finished or finished goods held in stock on the appointed day
S140(3) - Credit of Inputs Held in Stock

1. Such inputs or goods are used or intended to be used for making taxable supplies under CGST Act
2. Registered person is eligible for input tax credit on such inputs under CGST Act
3. Registered person is in possession of invoice or other prescribed documents evidencing payment of duty
4. Such invoices or other prescribed documents were issued not earlier than twelve months immediately
preceding the appointed day; and
5. The supplier of services is not eligible for any abatement under this Act
A registered person, other than a manufacturer or a supplier of services, who is not in possession of an invoice
or any other documents evidencing payment of duty may still be allowed to take credit subject to conditions and
restrictions
1. Benefits of such credit is passed on by way of reduced prices
2. Credit shall be restricted to 40% of the CGST to be paid on such goods
3. Credit can be availed at the time of supply of such goods
Eligible duties defined to mean all duties on which CENVAT credit is available under Rule 3 of CENVAT Credit
Rules 2004 except service tax and cesses
S140(4) - CENVAT Credit of Goods/Services Manufactured or Provided
A registered person
A. Engaged in the manufacture of taxable as well as exempted goods
B. Engaged in provision of taxable as well as exempted services
which are liable to tax under this Act, shall be entitled to take credit of
CENVAT carried forward in the last return furnished under the existing law in accordance with Section
140(1)
CENVAT of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or
finished goods held in stock on the appointed day, in accordance with Section 140(3)
S140(5) - Credit in respect of Inputs or Input Services During Transit
A registered person shall be entitled to take credit of

Eligible duties and taxes in respect of inputs or input services
Received on or after the appointed day
The duty or tax in respect of which has been paid by the supplier under the existing law
The invoice or any other duty or tax paying document was recorded in the books of account within a period
of thirty days from the appointed day unless such period is on sufficient cause being shown, extended by
the Commissioner for a further period not exceeding thirty days
Registered person furnishes a statement in respect of credit taken
Eligible duties defined to mean all duties on which CENVAT credit is available under Rule 3 of CENVAT Credit
Rules 2004 including service tax but excluding cesses
Section does enables taking of credit not availed for goods and services already received
S140(6) - Credit of Inputs to Person Switching From Composition Scheme
A registered person
A. Paying tax at a fixed rate or
B. Paying a fixed amount in lieu of the tax payable
shall be entitled to take credit of eligible duties in respect of inputs held in stock and inputs contained in semi-
finished or finished goods held in stock on the appointed day
1. Such inputs or goods are used or intended to be used for making taxable supplies under CGST Act
2. Registered person is not paying tax under composition scheme
3. Registered person is eligible for input tax credit on such inputs under CGST Act
4. Registered person is in possession of invoice or other prescribed documents evidencing payment of duty
5. Such invoices or other prescribed documents were issued not earlier than twelve months immediately
preceding the appointed day
Section 140(7) - Credit Distribution by Input Service Distributor
Notwithstanding anything to the contrary contained in this Act, the input tax credit on account of any services
received prior to the appointed day by an ISD shall be eligible for distribution as credit under this Act even if the
invoices relating to such services are received on or after the appointed day
ISD definition refers to receipt of the invoices towards the receipt of input services
No such provisions under SGST Acts in absence of ISD concept
Section 140(8) - Credit of ITC in case of Centralised Registration
A registered person
Having centralised registration under the existing law
Who has obtained a registration under CGST Act
shall be allowed to take credit of the amount of CENVAT carried forward in the last return
Credit should be admissible as input tax credit under the CGST Act
Return can be filed within three months of the appointed day and credit shall be allowed subject to the condition
that the said return is either an original return or a revised return where the credit has been reduced from that
claimed earlier
Such credit may be transferred to any of the registered persons having the same PAN who were covered under
the centralised registration
Section 140(9) - Reversal of ITC under Existing Law
CENVAT credit availed for the input services that has been reversed due to non-payment of the consideration
within a period of three months, can be reclaimed provided that the registered person has made the payment
within a period of three months from the appointed day
Section 140(10) - Manner of Calculating Credit
The amount of credit under sub-sections (3), (4) and (6) shall be calculated in such manner as may be
prescribed
Section 141(1)(2)(3) - ITC on Inputs Sent Out Under Existing Law
Inputs/ semi-finished goods/ excisable goods are sent in accordance with provisions of existing law
No tax shall be payable if returned within six months from appointed day
Type To For
1. Inputs (removed as such or Job-worker Processing, testing, repairing,
after being partially processed) reconditioning or any other purpose
2. Semi-finished goods Any other premise Carrying out certain manufacturing process
3. Excisable goods Any other premise Carrying out tests or any other process not
amounting to manufacture
The period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further
period not exceeding two months
If not returned within the period specified the input tax credit shall be liable to be recovered in accordance with
the provisions of section 142(8)(c)
Section 141(1)(2)(3) - ITC on Inputs Sent to Job Worker Under Existing Law
In respect of Semi Finished Goods and Excisable Goods (above) the manufacturer may transfer the said goods
To the premises of any registered person for the purpose of supplying therefrom on payment of tax in India
Without payment of tax for exports within the period specified in this sub-section
The tax under sub-sections (1), (2) and (3) shall not be payable, only if the manufacturer and the job worker
declare the details of the inputs or goods held in stock by the job worker on behalf of the manufacturer on the
appointed day
Tax will be payable by job-worker if not returned within six months from appointed day
Section 142(1) - ITC on Finished Goods Returned After Appointed Date
Where any goods on which duty had been paid under the existing law not being earlier than six months prior to
the appointed day are returned on or after the appointed day
If returned by unregistered person
Within a period of six months from the appointed day the registered person shall be eligible for refund
of the duty paid under the existing law and goods are identifiable to the satisfaction of the proper
officer
If returned by registered person
The return of goods shall be deemed to be a supply
Section 142(2) - ITC in case of Revision in Price
Where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or
both is revised on or after the appointed day
Registered person shall issue a document to the recipient
Situation RP is required to issue

Revised upwards Supplementary Invoice or debit note
Revised downwards Credit note
To be issued within thirty days of price revision

Such documents shall be deemed to have been issued in respect of an outward supply made under CGST
Act
The registered person shall be allowed to reduce his tax liability only if the recipient of the credit note has
reduced his input tax credit
Section 142(3) - Pending Refund Claims
Every claim filed before, on or after the appointed day for refund of any amount of CENVAT credit, duty, tax,
interest or any other amount paid under the existing law shall be disposed of in accordance with the provisions
of existing law
Any amount eventually accruing shall be paid in cash, notwithstanding anything to the contrary contained under
the provisions of existing law other than the provisions Section 11B(2) of the CEA, 1944
Where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse
No refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the
appointed day has been carried forward under CGST Act
Section 142(4) - Refund Claim of Goods/Services Exported Under Existing Law
Every claim filed after the appointed day for refund of any duty tax paid under existing law in respect of the
goods or services exported before or after the appointed day shall be disposed of in accordance with the
provisions of the existing law
Where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse
Section 142(5) - Refund Claim of Services not Provided
Every claim filed after the appointed day for refund of tax paid under the existing law in respect of services not
provided shall be disposed of in accordance with the provisions of existing law
No provision stating that amount rejected will lapse
Any amount eventually accruing shall be paid in cash, notwithstanding anything to the contrary contained under
the provisions of existing law other than the provisions Section 11B(2) of the CEA, 1944
Same provisions under SGST Acts except Telangana and Gujarat and Rajasthan which provide that any amount
of ITC reversed prior to appointed day shall not be admissible
Section 142(6) - Claim of CENVAT Credit for on Finalization of Proceedings
Every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before,
on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of
existing law
Any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding
anything to the contrary contained under the provisions of existing law other than the provisions Section 11B(2)
of the CEA, 1944
The amount rejected shall not be admissible as input tax credit under CGST Act
Every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before,
on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of
existing law
Any amount of credit becomes recoverable shall, unless recovered under the existing law, be recovered as an
arrear of tax under CGST Act
The amount so recovered shall not be admissible as input tax credit under CGST Act
Section 142(7) - Finalization of Proceedings Related to Output Duty/Tax Liability
Every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether
before, on or after the appointed day under the existing law shall be disposed of in accordance with the
Any amount found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to
the contrary contained under the provisions of existing law other than the provisions Section 11B(2) of the CEA,
1944
Every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether
before, on or after the appointed day under the existing law shall be disposed of in accordance with the
If any amount becomes recoverable shall, unless recovered under the existing law, be recovered as an arrear of
duty or tax under CGST Act
Section 142(8) - Treatment of Amount Recovered or Refunded on Account of
Assessment or Adjudication
Where in pursuance of an assessment or adjudication proceedings instituted whether before, on or after the
appointed day any amount of tax, interest, fine or penalty becomes recoverable shall, unless recovered under
the existing law, be recovered as an arrear of tax under CGST Act
Where in pursuance of an assessment or adjudication proceedings instituted whether before, on or after the
appointed day, under the existing law any amount of tax, interest, fine or penalty becomes refundable shall be
refunded to him in cash under the said law, notwithstanding anything to the contrary contained under the
provisions of existing law other than the provisions Section 11B(2) of the CEA, 1944
Section 142(9) - Treatment of Amount Recovered or Refunded on Account of
Revision of Returns
Where any return, furnished under the existing law is revised after the appointed day, if pursuant to such
revision any amount is found to be recoverable or any amount of CENVAT credit is found to be inadmissible
shall, unless recovered under the existing law, be recovered as an arrear of tax under CGST Act
Where any return, furnished under the existing law is revised after the appointed day, if pursuant to such
revision any amount is found to be refundable or any amount of CENVAT credit is found to be admissible shall
be refunded to him in cash under the said law, notwithstanding anything to the contrary contained under the
provisions of existing law other than the provisions Section 11B(2) of the CEA, 1944
Section 142(10) - Treatment of Long Term Contracts/Works Contract
The goods or services or both 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 CGST Act
Section 142(11) - Continuous or Periodic Supply
Notwithstanding anything contained in section 12

No tax shall be payable on goods under this Act
To the extent the tax was leviable on the goods under the Value Added Tax Act of the State
Notwithstanding anything contained in section 13,
No tax shall be payable on services under this Act
To the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994
Where tax was paid on any supply
Under the Value Added Tax Act and under Chapter V of the Finance Act, 1994
Tax shall be leviable under this Act
The taxable person shall be entitled to take credit of value added tax or service tax paid under the existing
law to the extent of supplies made after the appointed day
Section 142(12) - Treatment of Goods Sent on Approval Basis
Where any goods sent on approval basis

Not earlier than six months before the appointed day
Rejected or not approved by the buyer
Returned to the seller on or after the appointed day
No tax shall be payable if goods are returned within six months from the appointed day
The period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further
period not exceeding two months
The tax shall be payable by the person returning the goods
If returned after a period specified in this sub-section, such goods are liable to tax under this Act
The tax shall be payable by the person who has sent the goods on approval basis
If goods not returned after a period specified in this sub-section, such goods are liable to tax under this Act
Section 142(13) - Treatment of Tax Deducted at Source
Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source
under any law of a State or Union territory
Invoice issued before appointed date
Where payment to the supplier is made on or after the appointed day
No deduction of tax at source under section 51 shall be made by the deductor
Section 142(14) of SGST - Treatment of Goods Lying With Agent
Where any goods or capital goods belonging to the principal are lying at the premises of the agent on the
appointed day the agent shall be entitled to take credit of the tax paid on such goods or capital goods
1. The agent is a registered taxable person under CGST Act
2. The principal and the agent declare the details of stock of goods or capital goods lying with such agent on
the day immediately preceding the appointed day in such form and manner and within such time as may
be prescribed
3. The invoices for such goods or capital goods had been issued not earlier than twelve months immediately
preceding the appointed day
4. The principal has either reversed or not availed of the input tax credit in respect of such (a) goods; or (b)
capital goods or, having availed of such credit, has reversed the said credit, to the extent availed

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Transitional Provision Act Rules LM 17052017

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Transitional Provisions

Same provisions under SGST Acts*

*Rajasthan Gujarat, Telangana, UP, Punjab, Assam, Chhattisgarh

Credit entitlement is subject to following conditions

A registered person shall be entitled to take credit of

Situation RP is required to issue

To be issued within thirty days of price revision

The goods or services or both supplied on or after the appointed day

Notwithstanding anything contained in section 12

Where any goods sent on approval basis

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