GST Transitional Provision - Sec 139, 140, 141, and 142

Goods and Service Tax - GST
Transitional Provisions
CMA Arunava Chakraborty
CMA CP Kalra
CMA Md Rehan
(Cost Accountants)
Chakraborty kapoor & Co. LLP
F-1210, LGF, CR Park, New Delhi-20
cma.rehan@gmail.com
011-26275907, 9911299105
1
PRESENTATION ROADMAP
Migration of Existing Transitional
Tax Payers Arrangement for ITC
Transitional Provision Miscellaneous

related to Job work Transitional Provisions
Chakraborty Kapoor & Co. LLP 2

CHAPTER XX
TRANSITIONAL PROVISIONS
139. Migration of existing taxpayers.
140. Transitional arrangements for ITC
141. Transitional provisions relating to job work.
142. Miscellaneous transitional provisions

139. Migration of existing
taxpayers.

Sec 139- Migration of Existing Taxpayer/Dealer
Turnover>
20 Lakhs
Mandatory
Migration
Turnover<20
Lakhs
Existing Regime GST Regime

9/18/2017 6
Chakraborty Kapoor & Co. LLP

Section 139 Migration of existing taxpayers.
Who can Migrate to GST?

Section 139 (1)-Every person registered under earlier law and having
PAN No.
Registration shall be provisional
Section 139 (2)- Provisional Registration shall be replaced with final
registration in such form and manner and subject to such conditions as
may be prescribed.

Section 139 Migration of existing taxpayers. (Contd.)
Registration certificate issued u/s 139(1) shall be deemed to

have not been issued if said registration is cancelled in
pursuance of an application filed by such person that he was
not liable to registration under section 22 or section 24
(Note: Sec 22- Person Liable for registration. Sec 24- compulsory
registration under certain cases)

140. Transitional arrangements
for ITC

140. Transitional arrangements for ITC
CENVAT CREDIT U/S 140(1)
Section
140 (1)-A registered person other-than opting to pay tax u/s
10 (Composition Levy) shall be entitled to take Input Tax Credit.
Input Taxcredit available on CENVAT credit ,carried forward in

the return, furnished by registered person under the existing law in
such manner as may be prescribed:
Input tax credit should be admissible in the earlier regime
Also should be admissible in CGST/SGST Act
11
140. Transitional arrangements for ITC (Contd)
To Claim CENVAT Credit u/s 140 (1)
Application shall specify

(i) The value of claims u/s 3, u/s 5(3), u/s 6 and 6A and u/s 8 (8) of the Central Sales
Tax Act, 1956 made by the applicant during the financial year relating to the
relevant return, and
(ii) The serial number and value of declarations in Forms C and/or F and
Certificates in Forms E and/or H or Form I specified in rule 12 of the Central
Sales Tax (Registration and Turnover) Rules, 1957 submitted by the applicant in
support of the claims referred to in subclause (i) above;

When CENVAT Credit shall not be allowed to take u/s 140 (1)?
(i) If the credit is not admissible as input tax credit under GST; or
(ii) If he has not furnished all the returns required under the earlier law
for the period of six months immediately preceding the appointed date;
or
(iii) If credit relates to goods manufactured and cleared under exemption

notifications

Precautions to be taken u/s 140 (1)?

Claim all eligible credits in the last return
(service tax return, excise return, state VAT
return, Entry Tax return),
The taxpaying documents (like invoice) should
be in possession,
CENVAT credit audit to ensure no credit is missed out,
In case of ambiguity on service tax under RCM, better to pay the same and avail
credit (if eligible),
Special task force to be set up for collecting the pending statutory forms.

CENVAT Credit on Capital goods U/S 140 (2)
Input Tax credit available on Unavailed CENVAT credit in

respect of Capital Goods ,not carried forward in the return,
furnished by registered person under the existing law in such
manner as may be prescribed:
Input tax credit should be admissible in the earlier regime
Also should be admissible in CGST/SGST Act
Note: Unavailed Cenvat credit means the amount that remains after subtracting the amount
of Cenvat credit already availed

To Claim CENVAT Credit on Capital goods U/S 140 (2)
Application shall specify separately every items of capital goods as on

appointed day (1 July 2017)-
(i) the amount of tax or duty availed or utilized by way of input tax
credit under each of the existing laws till the appointed day, and
(ii) the amount of duty or tax yet to be availed or utilized by way of
input tax credit under each of the existing laws till the appointed
day;

Section 140 (3)

This section deals:
eligible credit of duties on:
Input held in stock
Inputs contained in semi-finished or finished goods held in stock
Who shall be entitled to take credit of eligible duties

Condition to avail input credit of eligible duties
If Condition not satisfied then how much input credit of eligible duties be
available

Credit of eligible duties u/s 140 (3)

Credit of eligible duties available on appointed day (1 July 2017) to:
inputs held in stock

Inputs contained in semi-finished or finished goods held in stock on
the appointed day (1 July 2017)

Credit of eligible duties u/s 140 (3)..(Contd)
Who shall be entitled to take credit of eligible duties u/s 140 (3)?
Following registered person shall be entitled to take credit of eligible duties:
who was not liable to be registered under the earlier law

Manufacture of exempted goods or provider of exempted services
Provider of works contract service and availing benefit of notification No.
26/2012Service Tax.
first stage dealer or a second stage dealer
registered importer or a depot of a manufacturer

Condition to avail input credit of eligible duties u/s 140 (3):
(i) Inputs or goods are used or intended to be used for making

taxable supplies under GST;
(ii) Input tax credit should be available such inputs/goods under
GST;
(iii) registered person should be in possession of invoice or other
prescribed documents evidencing payment of duty under the
earlier law in respect of such inputs;

Condition to avail input credit of eligible duties u/s 140(3):
(Contd)
(iv) such invoices or other prescribed documents were issued should
not be earlier than twelve months immediately preceding the
appointed day; and
(v) the supplier of services is not eligible for any abatement under this
Act:
Note: Persons having excise invoices for stocks lying as on 30th June
will be entitled to take full credit of excise mentioned in the invoices

If Condition not satisfied u/s 140(3)
then?
If Condition not satisfied u/s 140(3)

If the registered person (not registered in earlier law) other than manufacturer or
a supplier of services i.e trader is not in possession of invoice or any other
documents evidencing payment of duty in respect of inputs then:
such registered persons shall be allowed to take credit at such rate subject to such
conditions, limitations and safeguards as may be prescribed (Note: Refer it as
deemed credit) including that taxable person shall pass on the benefit of such
credit by way of reduced prices to the recipient.
Explanation : Persons not having excise invoices for stocks lying as on 30th June shall
not be entitled to take full credit
23
Deemed Credit GST Rule No. 3 u/s 140(3)

Registered Person whose condition is not satisfied u/s 140 (3)
Persons who do not have excise invoice, will be eligible to take credit in the following
manner:
a) For goods taxable @ 18% or above - Credit shall be allowed at the rate of 60%
of CGST payable on that goods so if the rate is 18% then credit will be
available @ 5.4% (60% of 9% CGST)
b) For goods other than above - Credit shall be allowed at the rate of 40% of CGST
payable on that goods so if the rate is 12% then credit will be available @ 2.4%
(40% of 6% CGST)

Deemed Credit GST Rule No. 3 u/s 140(3) (Contd)
Credit in Deemed Credit scheme will be available only once the said goods
are sold and GST is paid. Its like a cash back scheme.
To take the credit in this scheme following conditions will have to be

fulfilled:
a. such goods were not unconditionally exempt from excise

b. the document for procurement of such goods is available
c. the stock of goods on which the credit is availed is so stored that it can
be easily identified by the registered person.

Deemed Credit GST Rule No. 3 u/s 140(3) (Contd)
Deemed credit scheme will go on for 6 months from GST date, so

stocks lying as on 30th June have to be sold maximum upto 31st
December, 2017.

PRECAUTIONS TO BE TAKEN U/S 140 (3)

Prepare Stock Statement Summary as on 30.06.2017 (determining the
quantity, value, involvement of eligible duties, taxes and state VAT)
Make sure whether the Taxpaying Documents are available before
claiming any credit,
Such taxpaying documents should not have been issued earlier than
twelve months [Stock Level may be maintained at minimum level],
Pricing policy Such stock used / intended to be used for making
taxable supplies must lead to reduction in prices to the extent of
availment of benefit of ITC.

Extracts of Section 140(3) of CGST Act:
1. The goods/services are exempted in earlier law but will be taxable

in GST.
2. Credit in respect of stock will be available because ITC was not
available earlier
3. Person Having excise invoice will avail full credit
4. Person not having excise invoice will not avail full credit but 60%
& 40% subject to condition discussed earlier

Section 140 (4)

CENVAT CREDIT CARRIED FORWARD/ ELIGIBLE DUTIES
CENVAT Credit carried forward

Taxable in the return as per provision of
goods/services section 140(1)
Manufacturer or
supplier of services
Credit of input held in stock as
Exempted per provision of Section 140(3)
goods/services

Section 140 (5)

Credit Received After Appointed Day On Which Duties And Taxes
Paid Under Existing Laws
Input/ input
Duties or Tax paid services
under existing Law received
Sec 140(5)
Applicable
Appointed
date
Condition: The invoice/tax paying document should be recorded in the
books of accounts within 30 days of appointed day
Ensure that the duty / tax in respect of the taxpaying

document (i.e. against the invoice) has been
deposited. A certificate may be obtained in this regard
from the supplier.
Ensure that the invoice is duly received and recorded
in the books by 30.07.2017.
Ensure that double credit is not availed -
once in the earlier regime (may be when the payment is made) and
again in the GST regime (may be when the invoice is received)

SECTION 140 (6):

ITC FOR GOODS WHERE TAX IS PAID UNDER EARLIER LAW AT FIXED RATE
OR FIXED AMOUNT i.e COMPOSITION SCHEME
Person Paying TAX At a Fixed Now Registered

Rate or Paying a Fixed Amount Person
i.e Composite Scheme

Condition to avail credit of input held in stock on appointed day

u/s 140 (6):
Inputs/goods should be used or intended to be used for making

taxable supplies under GST
Person is not paying tax u/s 10 of GST
CONDITIONS FOR ITC should be available on such goods under GST;
ENTITLEMENT OF Invoices should be available evidencing payment of tax or duty
CREDIT and should not be earlier than 12 months prior to appointed day
Such goods were not wholly exempt or were not nil rated
Chakraborty Kapoor & Co. LLP9/18/2017

33
SECTION 140(7)
CREDIT OF INPUTS FOR ISD WHEN SERVICES RECEIVED AFTER
THE APPOINTED DAY
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.

Before filing of last return of ISD under earlier law, tag

the invoices which are considered for credit distribution
in respect of service received till 30.06.2017.
Further before filing of first return of ISD under GST
PRECAUTIONS TO regime, tag the invoices which are received after
BE TAKEN 30.06.2017 against the services received upto 30.06.2017
which were not considered under earlier law.

SECTION 140 (8)

UNUTILIZED CENVAT CREDIT WITH TAXABLE PERSON HAVING
CENTRALIZED REGISTRATION
Credit can be transferred to any business unit having the same PAN
Delhi Branch CENVAT credit should be furnished in last

return under the earlier law,
XYZ Ltd. Has Last return should have been filed within 3
centralised Chennai months from the appointed day,
registration in Branch Said credit must be admissible as ITC under
Mumbai GST law.
Haryana
Branch

SECTION 140 (9)

ITC REVERSED DUE TO NON PAYMENT UNDER EXISTING LAW
Where CENVAT credit reversed under earlier law due to non payment of
consideration within 3 months,
Such credit can be reclaimed, provided
Taxable person has made payment of consideration for the supply of services
within 3 months from the appointed day
Electronic Credit Ledger

A registered person shall be entitled to take his carried forward and
input of eligible duties u/s 140 in electronic credit ledger

141(1)(2)(3)(4). Transitional provisions
relating to job work.

Section 141 (1)(2)(3)(4). Transitional provisions for job work.
Goods removed for job work/from place of business to any other premises in
earlier law for further processing, testing, manufacture and returned on or after
appointed day.
If Goods
returned within No tax shall be payable
Semi- 6 months
Input
Finished
Input tax credit shall be liable to be
If Goods not
recovered in accordance with u/s 142 (8)
returned with in
(a). (Any amount not recovered in earlier
6 months
law shall be recovered in GST)
EXISTING REGIME GST REGIME

142. Miscellaneous
transitional provisions

142. Miscellaneous transitional provisions
Section 142(1) - If goods sold by manufacturer in earlier law six months prior
to appointed day (1 July 2017) returned within six months after appointed day (1
July 2017)
GOODS SOLD BY RETURNED BY DEALER POST 1 July 2017 WITHIN 6
MANUFACTURER 6 MONTHS MONTHS
PRIOR TO
1 JULY 2017 If Supplies returned: Remarks
From Un-Registered Person Manufacturer can claim refund of
Duty Paid
From Registered Person Termed as outward supply in the
hands of dealer- Manufacture can
claim ITC

142. Miscellaneous transitional provisions (Contd)
Section 142(2) -Issue of supplementary invoices, debit or credit notes

where price is revised in GST regime for a contract entered in earlier law
PRICE PRICE
RISE DECLINE
TO BE ISSUED WITHIN
30 DAYS
Supplementary Credit Note

invoice / Debit
Contract made in earlier law Note

Section 142(3) Claim for refund of CENVAT credit, duty, tax, interest or
any other amount paid under earlier law for the goods or services exported
If refund claim filed Before, on or after the Appointed Day (1 July 2017)
It would have to be processed according to earlier law. The provisions of GST law
would have no bearing on refund claim of earlier law.
1. The amount of refund will be paid in cash and would not be credited to the electronic credit
ledger or electronic cash ledger.
2. No amount of credit is c/f as on appointed day under GST
3. Refund claim rejected fully or partially shall lapse and not be available as credit.

Section 142(4) Claim filed after the appointed day (1 July 2017) for refund of
any duty or tax paid in earlier law for the goods or services exported
Where:~
Goods or services exported before or after the appointed day (1 July 2017)
It would be processed according to earlier law. The provisions of GST law would have no
bearing on refund claim of earlier law.
1. The amount of refund will be paid in cash and would not be credited to the electronic credit ledger
or electronic cash ledger.
2. No amount of credit is c/f as on appointed day under GST
3. Refund claim rejected fully or partially shall lapse and not be available as credit.
9/18/2017 45
Section 142(5) Claim filed after the appointed day (1 July 2017) for refund of
tax paid in earlier law in respect of services not provided
It would be processed according to earlier law. The provisions of GST law would
have no bearing on refund claim of earlier law.
1. The amount of refund will be paid in cash and would not be credited to the electronic
credit ledger or electronic cash ledger.

Section 142(6) Appeal & Review

The Section applies where any matter in respect of CENVAT credit is pending in an appeal
or review or reference under any of the earlier laws.
It provides that the provisions of CGST would have no bearing on the same and should be
dealt in accordance with the provisions of earlier laws as follows:
If the input credit are finally allowed: A refund would accrue to the claimant in cash.
If the input credit is disallowed: It would become recoverable by CGST department as
an arrear of tax.
The amount so recovered by CGST department would not be allowed as input tax
credit.

Section 142(7) Finalization of proceedings relating to output duty or tax

liability
~Every proceeding of appeal (Case) started on or after the appointed day for output duty or
tax liability under the earlier law shall be dealt according to earlier law
~Every proceeding of appeal & review (Case) for output duty or tax liability started before,
on or after the appointed day under the earlier law, shall be dealt according to earlier law,
If the amount found refundable (in proceeding & appeal for case of earlier law): amount shall be
refunded in cash.
If output duty or tax are found payable under proceeding (case of earlier law): It shall be paid as
an arrear to GST department (if it was not paid in earlier law). This amount so paid shall not be
allowed as input credit

Section 142(8) Output tax / duty liabilities pending in appeal & review (Case)
proceedings under any of the earlier law.
If an output duty or tax liabilities are pending in appeal & review (case) proceedings under
earlier law.
It provides as follows:
If the output liability is finally payable: It should be paid to GST department as an
arrear of tax.
The amount so paid to GST department would not be allowed as input tax credit.
If the amount found refundable (in proceeding & appeal for case of earlier law): amount
shall be refunded in cash.
If any amount is rejected, the same shall not be available as input tax credit under CGST.

Section 142(9) Return filed in earlier law revised in GST regime
where any return filed in earlier law is revised after appointed day (GST regime) but within time
limit specified under earlier law by virtue of which any amount becomes payable or refundable to,
the taxable person.
This could arise due to any of the following reasons:
(i) Short payment of output tax liability (payable);
(ii) Excess payment of output tax liability (refundable);
(iii)Short claim of CENVAT credit (refundable);
(iv)Excess claim of CENVAT credit (payable);
The Section specifies that:
If any amount is payable: It should be paid to GST dept. The amount so paid would not be
allowed as input tax credit.
If the amount is receivable as refund: It would accrue to the claimant as cash refund under the
existing law.

Section 142(10) Long Term Contract
Contract entered Contract continued of earlier law
goods or services are supplied

goods or services are supplied
liable to tax under the GST Act

Even if the construction contract or works contract is entered into prior to the appointed day, the
contracts would be taxable under the GST Act.

Section 142(11) Transaction which has suffered VAT/Service Tax
consideration was Goods/Services

received Supplied
GST shall not be payable on a supply to the extent VAT or Service Tax is leviable under
earlier law.
Eg: Advance of Rs. 1,00,000/- was received on 10th June, 2017 for service to be rendered
in July, 2017. The invoice for the service was raised for Rs. 1,50,000/- on 31st July, 2017.
On 1st July, 2017, GST shall be levied only on Rs. 50,000/-.

Tax paid on both Vat and Service Tax i.e Works Contract and food etc.
Supply Made
VAT/ST paid on advance but
supplies not made. (See example on VAT and ST paid in earlier law shall be
next slide) available as credit in GST to the extent
supplies made after appointed day (1
July 17)

Example: Contract entered in March, 2017 for Rs. 1 Crore. Advance amount received till
30th June, 2017 Rs. 10 Lakhs. VAT of Rs. 40,000/- and ST of Rs. 60,000/- have been paid
on the said advance. on 1st July, 2017 GST shall be levied on Rs. 1 Crore as per Sec 13 of
the CGST Act. VAT and ST paid under earlier law shall be available as credit GST
regime.

Section 142(12) Supply of Goods on Approval Basis
No tax shall be payable if goods rejected or not approved by buyer and returned to
seller if:
Goods Returned by buyer within six months
Goods sent by seller for approval within six
from appointed day or as extended period of
months before appointed day
two months by the commissioner
Tax Treatment if same goods taxable under GST regime

Goods returned from buyer after six months Goods returned to seller after six months or as
or as extended period of two months of extended period of two months of appointed
appointed day Seller shall pay GST. This day Buyer shall pay GST
shall be available as credit to purchaser

Section 142(13) TDS under Section 51 of CGST
This Section would apply in the following circumstances:

(i) The supplier had sold any goods under the earlier law; and
(ii) TDS applies on such transactions under earlier law; and
(iii) The supplier had issued the invoice before the appointed day;
(iv) Payment is made to the supplier after the appointed day.
It provides that merely because payment is made to the supplier after the date of
introduction of GST, the TDS provisions under Section 51 of the CGST Act will not apply.
In other words, Since transaction is related to earlier law, hence no tax shall be deductible
under GST regime at the time of making payment to the supplier

GSTs Time has started
Thank you
PPT made by CMA Md Rehan
Chakraborty Kapoor & Co. LLP (CKC LLP)

F-1210, LGF, CR Park, New Delhi-19
011-26275907, 9911299105, 9711515118
www.cmackc.com
info@cmackc.com, cma.rehan@gmail.com 57

GST Transitional Provision - Sec 139, 140, 141, and 142

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

GST Transitional Provision - Sec 139, 140, 141, and 142

Загружено:

Авторское право:

Доступные форматы

Goods and Service Tax - GST

Transitional Provision Miscellaneous

Chakraborty Kapoor & Co. LLP 2

139. Migration of existing taxpayers.

140. Transitional arrangements for ITC

141. Transitional provisions relating to job work.

142. Miscellaneous transitional provisions

Chakraborty Kapoor & Co. LLP 3

Chakraborty Kapoor & Co. LLP 4

Existing Regime GST Regime

Chakraborty Kapoor & Co. LLP 5

Chakraborty Kapoor & Co. LLP

Who can Migrate to GST?

Chakraborty Kapoor & Co. LLP 7

Registration certificate issued u/s 139(1) shall be deemed to

Chakraborty Kapoor & Co. LLP 8

Chakraborty Kapoor & Co. LLP 9

CENVAT CREDIT U/S 140(1)

Input Taxcredit available on CENVAT credit ,carried forward in

Chakraborty Kapoor & Co. LLP

To Claim CENVAT Credit u/s 140 (1)

Application shall specify

Chakraborty Kapoor & Co. LLP 12

(iii) If credit relates to goods manufactured and cleared under exemption

Chakraborty Kapoor & Co. LLP 13

Precautions to be taken u/s 140 (1)?

Chakraborty Kapoor & Co. LLP 14

CENVAT Credit on Capital goods U/S 140 (2)

Input Tax credit available on Unavailed CENVAT credit in

Chakraborty Kapoor & Co. LLP 15

To Claim CENVAT Credit on Capital goods U/S 140 (2)

Application shall specify separately every items of capital goods as on

Chakraborty Kapoor & Co. LLP 16

Section 140 (3)

Who shall be entitled to take credit of eligible duties

Chakraborty Kapoor & Co. LLP 17

Credit of eligible duties u/s 140 (3)

inputs held in stock

Chakraborty Kapoor & Co. LLP 18

Credit of eligible duties u/s 140 (3)..(Contd)

who was not liable to be registered under the earlier law

Chakraborty Kapoor & Co. LLP 19

Condition to avail input credit of eligible duties u/s 140 (3):

(i) Inputs or goods are used or intended to be used for making

Chakraborty Kapoor & Co. LLP 20

Chakraborty Kapoor & Co. LLP 21

If Condition not satisfied u/s 140(3)

Deemed Credit GST Rule No. 3 u/s 140(3)

Chakraborty Kapoor & Co. LLP 24

Deemed Credit GST Rule No. 3 u/s 140(3) (Contd)

To take the credit in this scheme following conditions will have to be

a. such goods were not unconditionally exempt from excise

Chakraborty Kapoor & Co. LLP 25

Deemed Credit GST Rule No. 3 u/s 140(3) (Contd)

Deemed credit scheme will go on for 6 months from GST date, so

Chakraborty Kapoor & Co. LLP 26

PRECAUTIONS TO BE TAKEN U/S 140 (3)

Chakraborty Kapoor & Co. LLP 27

Extracts of Section 140(3) of CGST Act:

1. The goods/services are exempted in earlier law but will be taxable

Chakraborty Kapoor & Co. LLP 28

Section 140 (4)

CENVAT Credit carried forward