Refund of VAT credit not carried forward in FORM GST TRAN-1 due to non-submission of FORM C

by | Oct 18, 2019

This update intends to apprise you regarding the availability of refund of Input Tax Credit (‘ITC’) of VAT, which could not be transitioned under GST due to non-availability of Form-C.


Section 140(1) of the respective State Goods and Services Tax Act, 2017 (’SGST Act’) allowed carry forward of closing balance of ITC earned under VAT laws subject to certain conditions.


Second proviso to Section 140(1) of the SGST Act restricted carry forward of ITC to the extent the taxpayer did not submit FORM C. Hence, several taxpayers could not carry forward full ITC in FORM GST TRAN-1.


Notably, third proviso to Section 140(1) of the SGST Act provides that the taxpayer is eligible for refund of amount of ITC not carried forward, on submission of FORM C.


Basis above, the taxpayers must regularly track FORM C pending on June 30, 2017 and apply for refund of VAT ITC as soon as they obtain and submit pending FORM-C with the VAT department.