Supreme Court directs re-opening of GST Portal for 2 months for filing TRAN-1 & TRAN-2

by | Jul 25, 2022 | Outlook | 0 comments

In a landmark move, Supreme Court in the case of UOI v. Filco Trade Center Private Limited, 2022-VIL-38-SC has directed re-opening of GST Portal to carry forward pre-GST credits into GST regime. The Supreme Court has directed as under:

  • GSTN will open Portal for filing / revising TRAN-1 & TRAN-2 during September 2022 to October 2022.
  • All taxpayers can file / revise TRAN-1 & TRAN-2 irrespective of whether taxpayer filed any Writ Petition or whether its’ case was decided by Information Technology Grievance Redressal Committee or not.
  • GSTN needs to ensure that there are no technical glitches during this period.
  • Revenue will verify this claim within 90 days and pass Orders on merits after granting reasonable opportunity to taxpayers. Post verification, credit will be reflected in Electronic Credit Ledger of taxpayer.
  • GST Council may consider issuing appropriate guidelines to field formations for scrutiny of such claims.

NITYA Comments: This judgment is a welcome move and comes as huge sigh of relief for entire industry. Taxpayers who missed transitioning any credit, can use this opportunity. Taxpayers who did not even attempt to file TRAN-1/TRAN-2 within prescribed period, are now eligible for credit.

At the same time, this judgment leaves open following issues for taxpayers:

  • Until now, there was no pre-condition of verification of claims for carrying forward transitional credits. Taxpayers need to watch out for scope of verification that will be undertaken.
  • Several taxpayers availed this credit in their GSTR-3B after favourable High Court orders. Such taxpayers will need to assess filing TRAN-1/TRAN-2 and thereafter reverse credit after transition. Interest for intervening period can be demanded by revenue which needs to be contested by taxpayers.
  • Some taxpayers were also pursuing refund claims for Excise Duty / CVD & SAD / Service Tax / VAT paid after implementation of GST on issues like:

    –    Credit of erstwhile taxes accounted for post due date of filing of TRAN-1
    –    Service Tax on Ocean Freight
     –   CVD / SAD due to non-fulfilment of export obligations under Advance Authorisation / EPCG scheme

Such taxpayers will need to continue such claims as these amounts did not form part of closing balance of pre-GST credits and date for revision of returns like ER-1 / ST-3 expired long back. 

  • Taxpayers who did not receive statutory forms like Form-C / Form-F on date of filing of TRAN-1 and subsequently received them, can carry forward credits to that extent. Such credits were not allowed to be transitioned earlier as per transitional provisions.
  • Taxpayers can consider carry forward of Cesses (if not transitioned earlier) to keep their claims alive. This issue is currently pending before the Supreme Court for final decision.

We are pleased to share that NITYA Tax Associates represented multiple clients in the above matter.



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