CA VIKRAM D MEHTA
The Sales Tax
Practisioners
Association
TRANSITIONAL ISSUES
IN GST
PRESENTED BY
CA VIKRAM D MEHTA
1
CA VIKRAM D MEHTA
Section 2(10) – “appointed day” means the date
on which section 1 of this Act comes into effect
Can there be different appointed days under
CGST and SGST laws?
Is it 1stJULY 2017?
What if one doesn’t apply for migration which is
currently going on?
2
CA VIKRAM D MEHTA
SECTION 139 OF CGST ACT
CURRENTLY REGISTERED DEALER
POSSESSING VALID PAN
SHALL BE GRANTED PROVISION REGISTTATION
SUBJECT TO CONDITIONS
CAN BE CANCELLED BY WAY OF AN APPLICATION
3
CA VIKRAM D MEHTA
SECTION 140 OF CGST ACT
1)
2)
3)
A registered person, (other than paying tax by a way composition a
person opting to pay tax under section 10: Composition levy),
Shall be entitled to take , credit ledger in his electronic credit
ledger.
The amount of CENVAT credit carried forward in the return period
ending prior to appointed date.
4
CA VIKRAM D MEHTA
140 (1): AMOUNT OF CENVAT CREDIT CARRIED FORWARD IN A
RETURN TO BE ALLOWED AS INPUT TAX CREDIT
Registered Person (Other
than Composition Tax
payer under Sec 10 of
CGST Act)
Provided that the said
credit is admissible
under GST Act
CENVAT Credit of Earlier
Laws carried forward in
return furnished under
earlier law
Entitled to be credited in
Electronic credit Ledger
5
CA VIKRAM D MEHTA
TRANSITION 140(1)……C/F OF CREDIT
Submit Electronic application in 60days from
appointed day in GST Trans -1
 Credit will not be allowed to transfer if

amount of credit
is not admissible
as input tax
credit under GST.
not furnished all the
returns required under
the existing law for the
period of six months
immediately preceding
the appointed date
said amount of credit relates
to goods manufactured and
cleared under such
exemption notifications as
are notified by the
Government
6
CA VIKRAM D MEHTA
NOVEMBER MODEL LAW SGST PROVISION
Registered Person (Other
than Composition Tax
payer under GST Act)
Provided that the said
credit is admissible under
GST Act
Not later than 90* days,
from appointed day
Credit of VAT and Entry Tax
of Earlier Laws carried
forward in return furnished
under earlier law
Entitled to be credited in
Electronic credit Ledger
7
CA VIKRAM D MEHTA
Credit attributable to Form “C” , “H”, :F” , “E1” , “E2” and “I” shall not
be eligible for credit in the electronic ledger.—Proviso in SGST ….
Whereas Direct Exports are not covered .
“Provided Further that so much of the credit as is attributable to any
claim related……that is not substantiated in the manner, and within the
period , prescribed in Rule 12 …..
Whether credit attributable to Form CST Sales will not be allowed or
difference of tax on Forms will be covered…?
For example:
If a registered dealer has sold the taxable goods outside Maharashtra
of Rs. 10.000,000/- and charged 2% tax on it i.e Rs. 2,00,000/- for
which the Form “C” is receivable for the entire 2% sale.
And the dealer is having the refund of Rs. 5,00,000/- to be carried
forward.
8
CA VIKRAM D MEHTA
ISSUES





Refund exceeding Rs 5 lakh not entitled to carried
forward under MVAT Law. Consequences?
Whether SGST provision in Maharashtra applicable only
in respect of carried forward set off less than Rs 5 lakh
and that too subject too availability of forms
Whether Refund amount of Rs 5 lakhs to be reduced
proportionately since only one quarter is falling under
the MVAT law….?
Proviso to Sec 50….whose refund claim in a year is
rupees five lakhs or less may………
Whether separate transitional rules will be coming for
Maharashtra.
9
CA VIKRAM D MEHTA
CAPITAL GOODS- UNAVAILED CREDIT
Registered Person ( Other than
Composition Tax payer under Sec
10 of CGST Act)
Provided that the said
credit is admissible under
GST Act and under the
current Act .
CENVAT Credit of unavailed
credit in respect of capital
goods.
Entitled to be credited in
Electronic credit Ledger.

Unavailed credit =Total credit on capital goodscredit already availed under the existing laws.
10
CA VIKRAM D MEHTA
140 (2): UNAVAILED CENVAT CREDIT ON CAPITAL GOODS, NOT
CARRIED FORWARD IN A RETURN, TO BE ALLOWED IN CERTAIN
SITUATIONS:
Distinct provisions for Cenvat on Capital Goods under
Excsie/Service Tax.
Under the MVAT Law, entire credit is allowable in the period in which
the capital asset is purchased and therefore, Whether this section
would have applicability in the state of Maharashtra?
Dealer engaged in business of right to use of passenger motor vehicle ,
credit restricted as per 53 (II)(a) MVAT rule whether can be claimed ..?
The credit taken has to be eligible under the old law as well as new law
and therefore whether credit will be allowed to be carried forward in
respect to motor vehicle used for business of right to use.
11
CA VIKRAM D MEHTA
TRANSITION SEC 140(2)…CAPITAL GOODS
ISSUE:
 In a situation where goods are lying in WIP and
ITC is not claimed can the same be claimed
under the new LAW when the capitalization is
done under the new law?
 Rules require to submit details of Credit availed
and yet to be availed under each existing law
as on appointed day.
12
CA VIKRAM D MEHTA
140 (3): CREDIT OF ELIGIBLE DUTIES AND TAXES IN RESPECT OF
INPUTS HELD IN STOCK TO BE ALLOWED IN CERTAIN SITUATIONS
REGISTERED UNDER GST
NOT REGISTERED UNDER /EXCISE/ SERVICE TAX/VAT
SELLING EXEMPT GOODS UNDER ABOVE LAW
TAXABLE IN GST
STOCK OF GOODS BEING INPUTS , SEMIFINISHED
ELIGIBLE TO CLAIM CREDIT OF TAXES ON GOODS IN STOCK
13
CA VIKRAM D MEHTA
TRANSITIONAL SEC 140(3)….
CONDITIONS:
1) Inputs/goods are used or intended to be used for making
taxable supplies
2) Eligible for input tax credit under GST Act
3) Credit of Input not specifically disallowed under Current
Law.(SGST Model law sec 169(1)(iv))
4) Possession of invoice or other prescribed documents
evidencing payment of duty under earlier law
5) Not earlier than 12 months immediately preceding the
appointed day
6) The said taxable person passes on the benefit of such
credit to the recipient
Dealers Covered…Exempt Goods/Services, First
Stage/Second Stage, Registered Importer, Depot of
Manufacturer, WCT availing 26/2012.
14
CA VIKRAM D MEHTA
TRANSITIONAL SEC 140(3)
Proviso to section 140(3)
In case duty paying documents not available ,
credit shall be allowed at the rate of 40% of the central tax applicable
on supply of such goods.
The credit in the electronic credit ledger will be granted on payment of
CGST- Rule 1- 3(a)
Provided the transaction is completed within 6 tax period (Months) and
the benefit of such credit is passed on by way of reduced prices
Available to other than Manufacturer/Service Porvider
Rules require to submit stock statement as on appointed day
Whether Works Contractors Eligible to take credit of inputs lying with
them under this clause..?
15
CA VIKRAM D MEHTA
ISSUES IN 140(3)
The credit as per the provisio to sec 140(3)means credit
of input tax
 The definition of input tax under the Section 2(62) reads
as under“input tax” in relation to a registered person, means the
central tax, State tax,integrated tax or Union territory tax
charged on any supply of goods or services or both made
to him and includes—…………..
 In view of above Whether passing of Credit to the extent
of Credit received @40% of CGST is mandatory..?
16
CA VIKRAM D MEHTA
140 (4): CREDIT OF ELIGIBLE DUTIES AND TAXES PERTAINING TO
EXEMPT GOODS OR SERVICES FOR A DEALER ENGAGED IN BOTH
REGISTERED UNDER GST
ENGAGED IN THE MANUFACTURE OF TAXABLE AS WELL AS EXEMPTED
GOODS UNDER CENTRAL EXCISE ACT
ENGAGED IN THE MANUFACTURE OF TAXABLE AS WELL AS EXEMPTED
SERVICES UNDER SERVICE TAX
TAXABLE IN GST
SHALL BE ENTITLED TO TAKE CREDIT IN ELECTRONIC CREDIT LEDGER
CENVAT credit c/f in a return furnished under the existing law and
CENVAT credit of eligible duties in respect of inputs held in stock and
inputs contained in semi-finished or finished goods held in stock on the
appointed day, relating to such exempted goods or services,
17
CA VIKRAM D MEHTA
140 (5): CREDIT OF ELIGIBLE DUTIES AND TAXES IN RESPECT OF INPUTS
OR INPUT SERVICES DURING TRANSIT
 Registered taxable person
 Entitled to credit of Input/Input services VAT and Entry Tax
 Of inputs/input services received after appointed day,
invoice/documents pertaining to previous period
 Recorded within 30 days of appointed day or such exceeded period
 Subject to furnishing a statement in such manner as may be
prescribed
18
CA VIKRAM D MEHTA
140 (6): REGISTERED TAXABLE PERSON UNDER GST WHO WAS PAYING TAX
UNDER COMPOSITION UNDER THE OLD LAW, HAS STOCK OF GOODS BEING
INPUTS OR SEMI FINISHED GOODS CAN CLAIM CREDIT, SUBJECT TO THE
FOLLOWING CONDITIONS
1) Inputs/goods are used or intended to be used for making taxable
supplies
2) Eligible for input tax credit under GST Act
3) Credit of Input not specifically disallowed under existing
Law.(SGST law only Model law 172(1)(iv))Clause should not be there
4) Possession of invoice or other prescribed documents evidencing
payment of duty / tax under earlier law
5) Invoice not earlier than 12 months immediately preceding the
appointed day
6) Stock Statement to be submitted.
7)Not registered as Composition Tax payer under GST Act
19
CA VIKRAM D MEHTA
COMPOSITION DEALER HAVING INPUTS IN
STOCK
Whether the above section will be applicable to
mandap keeper , Retailers,Restuarants, Caterers
and dealers paying tax under rule 59, Hotelier
composition, ?
 Whether Works Contracts Composition dealers will
be covered here? Whether C/f as per 140(1) and
140(6) on stock ,both will be applicable..?
 SGST draft law specifies that amount of credit
shall be as prescribed.

20
CA VIKRAM D MEHTA
SEC 140 (7)-ISD
Notwithstanding anything to the contrary
contained in this Act,
 the input tax credit on account of any services
received prior to the appointed day by an Input
Service Distributor
 shall be eligible for distribution as credit under
this Act even if the invoices relating to such
services are received on or after the appointed
day.

21
CA VIKRAM D MEHTA
SEC 140 (8)
Centralized registration under service tax
CENVAT carried forward in the Return Preceeding
appointed day.
Allowed to be transferred to Electronic Credit Ledger
To any registered person having same PAN for which
centralized registration obtained .
22
CA VIKRAM D MEHTA
EXAMPLE

Centralized registration covering Mumbai ,
Delhi , Calcutta , Bangalore CENVAT credit
CGST in return prior to appointed day Rs 4 lakh.
Options available
The distribution can be in any ratio
I
MUMBAI-2
DELHI-2
CALCUTTA-0
II
MUMBAI-1
CALCUTTA-3
III
BANGALORE-1
MUMBAI-1
DELHI-2
23
CA VIKRAM D MEHTA
SEC 140 (9)
CENVAT credit availed for the input services
provided under the existing law has been
reversed due to non-payment of the
consideration within a period of three months,
 such credit can be reclaimed subject to the
condition that the registered person has made
the payment of the consideration for that
supply of services within a period of three
months from the appointed day.

24
CA VIKRAM D MEHTA
141 (1): INPUTS REMOVED FOR JOB WORK AND RETURNED ON
OR AFTER THE APPOINTED DAY:
INPUT TO SENT TO JOB WORK BEFORE GST
RETURN AFTER GST WITHIN 6 MONTHS OR EXTENDED PERIODS
IF NOT RETURNED WITHIN 6 MONTHS OR FURTHER EXTENDED PERIOD OF 2
MONTHS
ITC TO BE RECOVERED
.
25
CA VIKRAM D MEHTA
RETURN OF GOODS SENT TO JOB WORKER

Option granted to supply goods from job work
premises subject to payment of tax or without
payement in case of Exports
PROVISO TO RULE 53(3) MVAT RULES
Provided further that the deduction provided in this
Subrule shall notapply if the goods dispatched ar
ebrought back to the State within six months of the
date of dispatch whether after processing or other
wise…whether extended period would apply..? Or
Saving clause will apply…?

26
CA VIKRAM D MEHTA
141 (2): SEMI-FINISHED GOODS REMOVED FOR JOB WORK
AND RETURNED ON OR AFTER THE APPOINTED DAY
SENT TO JOB WORK BEFORE GST
RETURN AFTER GST WITHIN 6 MONTHS OR EXTENDED PERIODS
IF NOT RETURNED WITHIN 6 MONTHS ITC TO BE RECOVERED
PROVIDED also that the person dispatching the goods may, in accordance
with the provisions of the earlier law, transfer the said goods to the
premises of any registered taxable person for the purpose of supplying
Therefrom on payment of tax in India or without payment of tax for exports
within six months or the extended period, as the case may be, from the
appointed day.
27
CA VIKRAM D MEHTA
141 (3): FINISHED GOODS REMOVED FOR CARRYING OUT
CERTAIN PROCESSES AND RETURNED ON OR AFTER THE
APPOINTED DAY:
FINISHED GOODS SENT TO JOB WORK BEFORE GST
RETURN AFTER GST WITHIN 6 MONTHS OR EXTENDED PERIODS
IF NOT RETURNED WITHIN 6 MONTHS ITC TO BE RECOVERED
PROVIDED ALSO that the person dispatching the goods may, in
accordance with the provisions of the earlier law, transfer the said goods
from the said other premises on payment of tax in India or without
payment of tax for exports within six months or the extended period, as
the case may be, from the appointed day.
28
CA VIKRAM D MEHTA
Conditions for exemption on Return of Goods -141(4)
The provisions of Rule 3 of transitional Rules shall apply
only if the person dispatching the goods and the job
worker declare the details of the goods held in stock by
the job worker on behalf of the said person on the
appointed day in such form and manner and within such
time as may be prescribed.
The rule is applicable to all the clauses of Job work
i e 141(1)(2)&(3)
29
CA VIKRAM D MEHTA
142 (1): DUTY PAID GOODS RETURNED TO THE PLACE OF
BUSINESS ON OR AFTER APPOINTED DAY
TAXABLE GOODS SOLD PRIOR TO SIX MONTHS ON OR BEFORE THE APPOINTED DAY
GOODS RETURNED WITHIN 6 MONTHS AFTER APPOINTED DAY
BY UNREGISTERED DEALER IN GST
REFUND ALLOWABLE
PROVIDED that if the said goods are returned by a registered taxable
person the return of the goods shall be deemed to be a supply.
Similar provision in November Model Law CGST.
30
CA VIKRAM D MEHTA
142 (2): ISSUE OF SUPPLEMENTARY INVOICES, DEBIT OR CREDIT
NOTES WHERE PRICE IS REVISED IN PURSUANCE OF A CONTRACT
SALES/SERVICE UNDER MVAT/SERVICE TAX
PRICE VARIANCE UPWARDS
SUPPLEMENTARY INVOICES, DEBIT NOTE WITHIN 30 DAYS OF REVISION
SHALL BE DEEMED TO BE SUPPLY UNDER GST LAW
31
CA VIKRAM D MEHTA
SALES/SERVICE UNDER MVAT/SERVICE TAX
PRICE VARIANCE DOWNWARDS
SUPPLEMENTARY INVOICES, CREDIT NOTE WITHIN 30 DAYS OF REVISION
SHALL BE DEEMED TO BE SUPPLY UNDER GST LAW
PROVIDED that the said registered taxable person shall be allowed to
reduce his tax liability on account of issue of the said invoice or credit
note only if the recipient of the invoice or credit note has reduced his
input tax credit corresponding to such reduction of tax liability.
32
CA VIKRAM D MEHTA
EXAMPLE
Goods sold to a unregistered person prior to a
appointed date and if half of the goods returned
within 6 months of the appointed day
How will the credit mechanism work?
33
CA VIKRAM D MEHTA
142 (3): PENDING REFUND CLAIMS TO BE DISPOSED OF UNDER
EARLIER LAW:
PENDING REFUND CLAIMS of CENVAT CREDIT UNDER EARLIER LAW
FILED BEFORE OR AFTER THE APPOINTED DATE
DISPOSED OFF IN ACCORDANCE WITH EARLIER LAWS
AMOUNT OF REFUND TO BE PAID IN CASH AS PER EARLIER LAW
REJECTED CLAIM FULLY / PARTIALLY SHALL LAPSE
NO REFUND CLAIM FOR ANY CREDIT WHICH HAS BEEN CARRIED FORWARD UNDER
GST
34
CA VIKRAM D MEHTA
142 (4): REFUND CLAIMS FILED AFTER APPOINTED DAY FOR GOODS
OR SERVICES EXPORTED TO BE DISPOSED OF UNDER EARLIER LAW:
PENDING REFUND CLAIMS UNDER EARLIER LAW
FILED AFTER THE APPOINTED DATE
DISPOSED OFF IN ACCORDANCE WITH EARLIER LAWS
AMOUNT OF REFUND OF ANY DUTY OR TAX PAID IN RESPECT OF GOODS OR
SERVICES EXPORTED BEFORE OR AFTER THE APPOINTED DAY
REJECTED CLAIM FULLY / PARTIALLY SHALL LAPSE
NO REFUND CLAIM FOR ANY CREDIT WHICH HAS BEEN CARRIED FORWARD UNDER
GST
35
CA VIKRAM D MEHTA
142 (5): REFUND CLAIMS FILED AFTER APPOINTED DAY FOR
SERVICES NOT PROVIDED TO BE DISPOSED OF UNDER EARLIER LAW:
PENDING REFUND CLAIMS UNDER EARLIER LAW
FILED AFTER THE APPOINTED DATE
DISPOSED OFF IN ACCORDANCE WITH EARLIER LAWS
AMOUNT OF REFUND OF TAX PAID UNDER EXISTING LAW IN RESPECT OF SERVICES
NOT PROVIDED
ANY AMOUNT EVENTUALLY ACCURING SHALL BE PAID IN CASH
NOTWITHSTANDING ANYTHING CONTRARY CONTAINED U/S (2) OF 11B OF THE
CENTRAL EXCISE AXT, 1944
36
CA VIKRAM D MEHTA
142 (6),(7): FINALIZATION OF PROCEEDINGS RELATING TO
OUTPUT DUTY OR TAX LIABILITY:
Any proceedings (Including appeal , review, reference) related to
output tax liability / Allowance of Cenvat Credit initiated before
or after APPOINTED DAY pertaining to earlier law shall be
disposed off as per earlier law.
The liability so determined shall be recovered as arrears of GST
law.
In case of refund the same shall be granted as per earlier law
notwithstanding provisions of sec 11B(2) of Excise law.
37
CA VIKRAM D MEHTA
140(8): TREATMENT OF THE AMOUNT RECOVERED OR REFUNDED
IN PURSUANCE OF ASSESSMENT OR ADJUDICATING
PROCEEDINGS
Pursuance of an assessment or adjudication proceedings
Instituted before, on or after appointed day
Under the earlier law
OUTCOME….
38
CA VIKRAM D MEHTA
Outcome of
adjudication
Proceedings
Tax, Interest and
Penalty found to
be recoverable
Tax, Interest and
Penalty found to
be refundable
Recover as
arrear under GST
Act
Refund in Cash
as per old law.
39
CA VIKRAM D MEHTA
142 (9): TREATMENT OF THE AMOUNT RECOVERED OR
REFUNDED PURSUANT TO REVISION OF RETURNS
RETURN FILED
UNDER EARLIER
LAWS
Amount of tax to be
recovered or credit is
inadmissible
REVISED AFTER
APPOINTED DATE
Amount found to be
refundable or credit
found admissible
If return revised within
time limit as prescribed in
earlier law
Recover as arrear
under GST Act
Refund in Cash as
per old law
40
CA VIKRAM D MEHTA
142(10): SUPPLY IN A CONTINOUS CONTRACTS IN GST
142(11): PART SUPPLY IN GST
Save otherwise provide Contracts entered prior to appointed
day and goods/services supplied on or after appointed day
…taxable
under GST
Notwithstanding above if tax paid on goods under
earlier act , to that extent no tax payable under GST
Similarly if tax paid on Services under earlier law, to
that extent no tax payable under GST
41
CA VIKRAM D MEHTA
142(11)(A): TAXABILITY OF SUPPLY OF GOODS IN CERTAIN
CASES
Taxable Goods
Point of
taxation
Before
appointed
day
Tax as per
earlier law
Where portion of supply of goods is not covered above, then upto that extent
liable under GST Act
42
CA VIKRAM D MEHTA
142(11)(b): TAXABILITY OF SUPPLY OF SERVICES IN CERTAIN
CASES:
Taxable Services
Point of
taxation
Before
appointed
day
Tax as per
earlier law
Where portion of supply of service is not covered above, then upto that extent
liable under GST Act (SGST)
43
CA VIKRAM D MEHTA
142(11)(C)….COMPOSITE CONTRACTS
Taxability of composite contracts involving
payment under VAT as well as service tax
continuing after appointed day.
 Entitled to take credit of VAT, Service tax paid
from the tax on supplies made after appointed
day as prescribed…..

44
CA VIKRAM D MEHTA
142(12): GOODS SENT ON APPROVAL BASIS RETURNED ON OR
AFTER THE APPOINTED DAY
Goods sent on
approval basis
Not earlier than 6
months before the
appointed day
Rejected and sent
back by the buyer
to seller after
appointed day
Competent
authority may
extend by another
2 months
If returned within 6
months of
appointed day
No Tax
45
CA VIKRAM D MEHTA
GOODS SENT ON APPROVAL BASIS
Goods not returned
within 6 months or
extended period
• Liability to pay tax
on person who
has sent for
approval
Goods returned after
6 months or
extended period
• Liability to pay tax
on person who is
returning the
goods
46
CA VIKRAM D MEHTA
: DEDUCTION OF TAX AT SOURCE
Supplier made sale of goods under earlier law
Invoice issued before appointed day
Payment made after appointed day
No Tax at source to be deducted
47
CA VIKRAM D MEHTA
TRANSITIONAL PROVISION FOR GST
PRACTITIONER
PREPARE TO INVEST WORKING CAPITAL IN YOUR
PROFESSIONAL WORK….
CASH SYSTEM
MERCANTILE SYSTEM
48
CA VIKRAM D MEHTA
THANK YOU
VIKRAM D MEHTA
D.R.MEHTA & ASSOCIATES
9TH FLOOR,H-2,EVEREST BUILDING
TARDEO ROAD,TARDEO,MUMBAI-34
MOB-9869036230
[email protected]
49