GST TRAN-1 filing for claiming credit till 30.06.2020

Notification No. 43/2020 dated 16.05.2020:

The Central Government hereby appoints the 18.05.2020 as the date on which provisions of section 128 of the Finance Act, 2020, shall come into force.

Section 128 of Finance Act, 2020:

In section 140 of the Central Goods and Services Tax Act, with effect from the 1^st day of July, 2017,—

(a) in sub-section (1), after the words “existing law”, the words “within such time and” shall be inserted and shall be deemed to have been inserted;

(b) in sub-section (2), after the words “appointed day”, the words “within such time and” shall be inserted and shall be deemed to have been inserted;

(c) in sub-section (3), for the words “goods held in stock on the appointed day subject to”, the words “goods held in stock on the appointed day, within such time and in such manner as may be prescribed, subject to” shall be substituted and shall be deemed to have been substituted;

(d) in sub-section (5), for the words “existing law”, the words “existing law, within such time and in such manner as may be prescribed” shall be substituted and shall be deemed to have been substituted;

(e) in sub-section (6), for the words “goods held in stock on the appointed day subject to”, the words “goods held in stock on the appointed day, within such time and in such manner as may be prescribed, subject to” shall be substituted and shall be deemed to have been substituted;

(f) in sub-section (7), for the words “credit under this Act even if”, the words “credit under this Act, within such time and in such manner as may be prescribed, even if” shall be substituted and shall be deemed to have been substituted;

(g) in sub-section (8), for the words “in such manner”, the words “within such time and in such manner” shall be substituted and shall be deemed to have been substituted;

(h) in sub-section (9), for the words “credit can be reclaimed subject to”, the words “credit can be reclaimed within such time and in such manner as may be prescribed, subject to” shall be substituted and shall be deemed to have been substituted.

Last date of filing GST TRAN-1:

As per Notification No.49/2019 dated 09.10.2019 issued by CBIC, the date prescribed for filing of Form GST TRAN-1 under Rule 117 (1A) of the CGST Rules has been extended to 31.12.2019.

Delhi High Court’s Order dated 05.05.2020 in the case of:

• BRAND EQUITY TREATIES LIMITED vs THE UNION OF INDIA & ORS. [W.P.(C) 11040/2018 and C.M. No. 42982/2018]
• MICROMAX INFORMATICS LTD. vs UNION OF INDIA & ANR [W.P.(C) 196/2019& CM APPL. 965/2019]
• DEVELOPER GROUP INDIA PRIVATE LIMITED vs UNION OF INDIA & ORS. [W.P.(C) 8496/2019]
• RELIANCE ELEKTRIK WORKS vs UNION OF INDIA & ORS. [W.P.(C) 13203/2019]

Extract of findings from the said order:

Civil rights can be enforced within a period of three years from the date of commencement of limitation under the Limitation Act, 1963.

While interpreting Order VIII Rule 1 CPC, the Supreme Court has observed that the time limit for filing written statement is directory in nature and not mandatory, and that “procedural law is not to be a tyrant but a servant, not an obstruction but an aid to justice” [Ref: Salem Advocates Bar Association v. Union of India AIR 2003 SC 189].

The purport of the transitory provisions is to allow a smooth migration from the erstwhile service tax regime to the new GST regime and the interpretation must be in consonance with the said purpose.

Accordingly it was held by Delhi High Court in the said case that Rule 117 as being directory in nature, insofar as it prescribes the time-limit for transitioning of credit and therefore, the same would not result in the forfeiture of the rights, in case the credit is not availed within the period prescribed. This however, does not mean that the availing of CENVAT credit can be in perpetuity. Transitory provisions, as the word indicates, have to be given its due meaning. Transition from pre-GST Regime to GST Regime has not been smooth and therefore, what was reasonable in ideal circumstances is not in the current situation. In absence of any specific provisions under the Act, we would have to hold that in terms of the residuary provisions of the Limitation Act, the period of three years should be the guiding principle and thus a period of three years from the appointed date would be the maximum period for availing of such credit.

The Petitioners have filed or attempted to file Form TRAN-1 within the aforesaid period of three years they shall be entitled to avail the Input Tax Credit accruing to them. They are thus, permitted to file relevant TRAN-1 Form on or before 30.06.2020.

Conclusion:

Based on period of limitation an assessee can file TRAN-1 for claiming credit eligible under the erstwhile Law till 30.06.2020.