Tran or VAT Refund- Which is better under GST?

TRAN vs VAT Refund Claim : Which is better under GST?

What shall be the treatment of Input Credit of old stock in Tran 1 After GST? In order to claim input of old stock in GST, you have to submit the records of the tax credits in TRAN 1 / TRAN 2.

Scenarios for treatment of Input Credit of old stock in TRAN 1:

Treatment of Input Credit of old stock for Industry under GST

Treatment of Input Credit of old stock for Industry under GST

Here are possible scenarios for any industry:

Do you Have C Form?

  • Yes, We have C Forms
    • We have a complete set of C Forms.
      • Payable Tax = This will be net liability person has to pay after claiming input credit of VAT, CGST, SGST & IGST i.e. (Output tax liability) – (Transitional credit + credit under GST).
    • We don’t have complete set of C Forms
      • Option 1: Pay the Differential tax b/w VAT & CST, claim a refund after VAT Assessment.
      • Option 2: Wait for C forms completion and pay late fee+ interest.
      • Option 3: Claim in TRAN NIL against pending Form C, file refund application to claim C form credit.
  • No, We have C Forms
    • Pay the Differential tax b/w VAT & CST.

Therefore in case of pending C forms, amongst the above 3 option-the 3rd option makes a better choice:

Credit to claim from TRAN

Conclusion:

We think that under GST the mechanism of claiming credit from old regime is very simple for Service tax and Excise duty but at the same time it has created hardships for people who has to claim credit of VAT regime belonging to C forms.

We have come up with this article to guide people to avoid the hardship arising from filing TRAN 1 in case there are missing C/ F Forms, by opting for the mechanism of filing Refund application and claim the credit from VAT department.

References:

Rules for claiming Input Credit through TRAN

How to Fill TRAN 1- Take help from this video

 

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