TRAN 1 and TRAN 2 are forms that the CBEC released to allow taxpayers to carry forward their input tax credit. Any businesses which had a closing stock before GST implementation can claim input credit for the taxes paid under the previous regimes.

TRAN 1 is the transition form for taxpayers registered under GST and may be registered or unregistered under old regime. TRAN 2 is the transition form for taxpayers registered under GST but unregistered under previous regime.

GST Consulting, TRAN-1, TRAN-2

Conditions to claim credit

In case of stock of finished goods, the taxpayer should meet the following conditions to claim input credit:

  • Stock used for making taxable supplies under this act.
  • The person making the claim is eligible to claim ITC under this act.
  • Supplier of the service is not eligible for abatement under this act.
  • The person must have the invoice or prescribed documents.
  • He issued such invoices between 1st July 2016 and 1st July 2017.

Who can file the claim?

The following people can file TRAN 2:

  • GST Registered taxpayers who were previously unregistered but had closing stock as on 30th June 2017.
  • Registered persons who do not have any proof or document about payment of taxes.

Who cannot file TRAN 2?

  • Manufacturer registered under excise.
  • Service provider registered under service tax.

Rules to claim credit under TRAN 2

  • Taxpayers have to file separate transition forms for each GSTIN.
  • The credit which you are carrying forward must be eligible under GST as well.
  • You can carry forward accumulated credit of old regime if you have filed VAT/Excise/Service Tax returns for past 6 months.

GST Registration, TRAN-1, TRAN-2

Conditions to claim credit of Central Tax and State tax- Applicable in case of States offering Tax on MRP Scheme.

  • Central tax and/or state tax is paid.
  • Goods are not Nil rated or fully exempt from Excise Duty or under the State VAT Act.
  • Registered person has the document for purchase of such goods.
  • Amount is credited to Electronic Credit Ledger (ECL).
  • The registered person stores the stock of goods in a way that he can easily identify it.

When to file TRAN 2?

A dealer or trader should file TRAN-2 at the end of every month when he sells the stock. The trader/dealer should report the relevant details to claim input tax credit.

TRAN-2 Update, TRAN-1, TRAN-2

Earlier the due date for filing TRAN-2 was 31st March 2018.

The new due date is 30th June 2018.

Unavailed ITC

Taxpayers could not take 100% ITC for capital goods in the first year of purchase.They could avail only 50% in the first year & remaining 50% in subsequent year. The registered person who was able to claim partial amount in the old regime, can claim the remaining under GST.

Stock sent or received for job work

A principal manufacturer may send his goods for job work. If such goods are lying with the job worker as on 1st July, it is also a stock held by principal manufacturer. Manufacturer can claim input tax credit on this.

These are the details that principal manufacturer and job worker should mention in the form:

  • Challan number and date
  • Type of goods (raw material, semi-finished/ finished goods)
  • Description of goods – HSN, unit, quantity, value
  • GSTIN of manufacturer or job worker