Traders get 90 days to claim credit for GST transition stock

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An Indian consumer goods trader shows letters GST representing "Goods and Services Tax" (GST)at his shop in Hyderabad on August 3, 2016. Finance Minister Arun Jaitley said India was on the cusp of its biggest tax reform since independence ahead of a vote in parliament later August 3, on a new national sales tax. The Goods and Services Tax (GST) will replace a patchwork of central and state levies on goods and services and is one of Prime Minister Narendra Modi's biggest reforms since taking power in May 2014 . / AFP PHOTO / NOAH SEELAM

Traders and retailers can file declarations within 90 days claiming a tax credit for transition stock after the GST rolls out from July 1.

The transition rules approved by the GST Council provides that “every registered person entitled to take credit of input tax shall, within 90 days of the appointed day, submit a declaration electronically, specifying separately, the amount of input tax credit to which he is entitled…”.

It also gives commissioners the power to extend this period by further 90 days on the recommendation of the GST Council.

To avail this a manufacturer can issue a Credit Transfer Document (CTD) as evidence for excise payment on goods cleared before the introduction of GST to the dealer.

The dealer availing credit using CTD would also have to maintain copies of all invoices relating to buying and selling from the manufacturer to the dealer, through intermediate dealers.

CTD shall be issued within 30 days of July 1, 2017, and details of the same shall be mentioned in specified forms by manufacturer and such dealer/distributor availing the credit.

For claiming deemed credit, the goods should be leviable to excise duty or additional customs duty and the goods should not be unconditionally exempt from the whole of the excise duty.

For claiming the credit of service tax or VAT paid in the current regime against GST liability for supplies made in GST regime, a dealer would be required to furnish details of the proportion of such supply made.