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With the implementation of Goods and Service Tax from 7th July 2017 one of the major concerns of dealers is about the transition from old laws to GST. They worry about the transition of the tax credit of taxes paid on inward supplies. And what will be the procedure to be followed if the manufacturer of goods was registered under the Central Excise Act, 1944 and dealers were not registered under it under old laws.
However, after the implementation of GST, the same dealer is covered under the ambit of Goods and Service Tax and need GST Registration in India. To facilitate the transition of CENVAT Credit in such a situation, the government has notified Draft Rule for the issue of Credit Transfer Document on 4th June 2017.
These rules are to be inserted in the CENVAT Credit Rules, 2004 for the transfer of credit in case of specified goods available with the trader as on appointed date. As per these rules, the manufacturer is required to issue Credit Transfer Document (CTD) to the dealer for goods manufactured and cleared before 1st July 2017, evidencing the payment of Excise Duty by him. And the dealer can claim an input tax credit for the same on the basis of CTD.
It is a form issued by a manufacturer of goods as an evidence of excise duty payment on goods manufactured and cleared before July 1st.
Following details are to be filled in the CTD:
This Credit Transfer Document provision stated in this rule is a huge relief to the dealers, but it is subjected to certain preconditions and limitations. List of such conditions as stated below:
General Conditions:
Conditions relating to Manufacturer:
Conditions relating to Dealer:
This Credit Transfer Documents shall be issued within 30 days from the implementation of the CGST Act, 2017 i.e. 1st July 2017. Moreover, this document must be accompanied by corresponding invoices relating to such goods.
The time limit for making these submissions is 60 days from the appointed date, i.e. 1st July 2017.
Lastly, we will discuss a situation if CENVAT credit is availed twice i.e. if the manufacturer has issued a credit transfer document in such a way that tax credit is availed twice for the same goods under GST laws. In this situation manufacturer as well as the dealer will be held equally and severally responsible for such excess credit amount paid along with any interest and penalty to be paid on the same.
It may be noted that upon issuing the Credit Transfer Document, the authority is required to follow the limitations, conditions and procedures prescribed. For more information on any GST related query, contact Enterslice.
Read our article: Govt. Allows Taxpayers to File GSTR-3B Returns in a Staggered Manner
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