The total tax mopped during the month of July was a mammoth figure of Rs 96,000 crore marking the success of GST journey. The major contribution of revenue came from the SMEs and MSMEs across the nation which shows how much GST compliant various business segments are and have welcomed the new taxation regime wholeheartedly.
The GST collection values has revealed the acceptance of GST and has given opportunities for businesses to get back their transitional values. The valid transitional credit claimed till date has been just Rs 12,000 crore which in no ways is seen to impact the collection value of Rs 96,000 crore. There are still many transitional credit claims which are under scrutiny and could be claimed with the help of TRAN 1 form.
With the implementation of GST, the government has allowed businesses to avail Input Tax Credit (ITC) on stocks purchased before July 1. Any business can now claim for services and VAT which has been encompassed in GST.
As per the transitional rules, businesses could claim input tax credit of 60% for items where GST rates exceeds 18% before July 1 and in case of items where GST rates is below 18% businesses could claim input credit taxes of 40%. The Council has also extended the date for filing TRAN-1 form till October 31, 2017.
Various Transitional Credit provision available under GST
As per rule there are three types of transitional credit provision available under GST which are listed as
- Input tax credit,
- refunds and arrears
- Cases like composition scheme.
Conditions where Transitional credit is possible
- The transitional credit is possible under certain cases and could be filed with the help of form TRAN 1. When Closing balance of credit on inputs is available for the last six months from Jan 2017 to June 2017.
- The transition credit could also be taken on capital goods. If an item worth Rs 10, 000 is purchased 50% of it could be claimed in the same year and the rest 5000 Rs could be claimed the next year.
- The transitional credit could also be taken on goods lying on closing stocks on which duty has been paid.
How to claim transitional credits when you have no invoices?
The businesses which has no service providers or those who do not have an invoice evidencing payment of duty, cannot claim the credit under the GST regime.For such parties or businesses claim credit could be possible only if the stock is identifiable separately. The credit can be taken by the trader only if the benefit of the same is passed on to the final consumer.
