Filing or Revising TRAN 1 and TRAN 2

As we know, various indirect taxes are subsumed into one single tax i.e. Goods and Services Tax (GST). Accordingly, transition provisions were incorporated under GST to ensure smooth and hassle-free migration from erstwhile laws into GST law. We are discussing on filing or revising TRAN 1 and TRAN 2 guidelines and SC court judgments.

One of the major concerns of the taxpayer under transition will obviously be that benefit of credit (input tax credit) earned in the erstwhile law is completely made available to them in GST.

However, GST being a major tax reform and the same being completely digital, lots of technical glitches were being faced by the taxpayer during the early stage of the introduction of GST. Hence, instead of being a smooth transition, it was a total roller coaster ride for the taxpayer.

In order to clear up all the earlier blunders and to make available the transitional credit to the taxpayer into the new regime i.e. under GST, the Government has decided to reopen the filing of form TRAN-1 and/ or TRAN-2 necessary for claiming transitional credit from 1st October 2022 to 30th November 2022.

Accordingly, the guidelines for filing/ revising the forms are prescribed, vide circular no. 180/12/2022- GST dated 9th September 2022. The same is taken up and briefly explained in the present article.

What Problem Taxpayers Faced Earlier

Taxpayer problem

Goods and Services Tax was introduced with effect from 1st July 2017. However, the transitional route for the taxpayer was not smooth.

Notably, the transition provisions, under GST, are covered under provisions of section 140 of the Central Goods and Services Tax Act, 2017 and the time limit for claiming the same is prescribed under rule 117 of the Central Goods and Services Tax Rules, 2017.

Notably, due to lot of chaos at the time of the introduction of GST and various technical glitches, many taxpayers were not able to meet up the due date (even though extended several times) for claiming the transitional credits. On the other hand, many taxpayers have committed errors while filing requisite forms (TRAN-1/ TRAN-2) for claiming transitional credits.

Resultantly, lots of applications for claiming transitional credits got rejected. Accordingly, the huge number of matters got pending before various authorities and courts.

Supreme Court Judgement on Filco Trade Centre

SC judgements

In the midst of lots of litigations pending before various adjudicating/ appellate authorities and High Courts, the most controversial matter was taken up by the Hon’ble Supreme Court, in the case of Union of India vs. Filco Trade Centre Pvt. Ltd.

While pronouncing the judgement, Hon’ble Supreme Court vide order dated 22nd July 2022 [SLP(C) No. 32709-32710/2018], provided the following important directions
  • GSTN (Goods and Service Tax Network) is directed to open the GST common portal and enable filing/ revising forms TRAN-1 and TRAN-2 for availing transitional credit for two months i.e. from 1st September 2022 till 31st October 2022.
  • Post opening of the GST common portal for filing of the forms, all the aggrieved registered assessee under GST is directed to file/ revise TRAN-1 and/ or TRAN-2.
  • During the period the GST common portal is kept open for filing TRAN 1 and TRAN 2, GSTN needs to ensure that there is no technical glitch.
  • Post filing or revising TRAN 1 and TRAN 2, the concerned officer will have 90 days time to verify the transitional credit claim and thereafter pass an appropriate order.
  • Once the transitional credit is allowed, the same is to be reflected in the Electronic Credit Ledger. Notably, the time period for opening the GST common portal was extended for four weeks vide SLP(C) No. 32709-32710/2018.

Guidelines for Filing or Revising TRAN 1 and TRAN 2 

On the basis of the directions given by the Hon’ble Supreme Court, the Central Board of Indirect Taxes and Customs (CBIC) issued a circular no. 180/12/2022- GST dated 9th September 2022.

The said circular covered guidelines for filing or revising TRAN 1 and TRAN 2 which are explained hereunder

Facility available to the taxpayer

  1. The taxpayer is facilitated to freshly file TRAN-1 and/ or TRAN-2 and claim transitional credit; or
  2. The taxpayer is facilitated to revise earlier filed TRAN-1 and/ or TRAN-2 and appropriately claim transitional credit.

Period for which the facility is available to the taxpayer

The taxpayer can file or revise TRAN-1 and/ or TRAN-2 on the GST common portal from 1st October 2022 to 30th November 2022.

Filing or revising of TRAN 1 and TRAN 2

Steps for filing or revising of TRAN 1 and TRAN 2 during the period 1st October 2022 to 30th November 2022 are summarized in the below paragraphs.

Procedure post TRAN-1/ TRAN-2 is filed/ revised

Once the transitional credit application is filed/ revised, it will be processed in the following manner

  • The application will firstly be verified by the proper officer;
  • If asked, the applicant will have to submit requisite records, returns, invoices, documents, etc. with the proper officer;
  • After verification, the proper jurisdictional officer will pass an appropriate order;
  • If the transitional credit is allowed, the same will be reflected in the Electronic Credit Ledger of the respective applicant.

How to  file/ revising TRAN 1/ TRAN 2

Process for Filing or Revising TRAN 1 and TRAN 2

The applicant wiling to file/ revise TRAN-1/ TRAN-2 is required to follow the below steps

STEP 1 – Visit https://www.gst.gov.in;

STEP 2 – Click the ‘Login’ icon available on the right-hand side;

STEP 3 – Enter appropriate ‘Username’, ‘Password’ and type the characters shown in the image;

STEP 4 – Click LOGIN;

STEP 5 – Follow the below navigation path –

            Services > Returns > Transition Forms;

STEP 6 – File TRAN 1/ TRAN 2 or revise the earlier filed TRAN 1/ TRAN 2;

STEP 7 – Upload a pdf copy of the declaration in Annexure-A;

[It is important to note here that the format of declaration in Annexure-A is provided in circular no. 180/12/2022-GST dated 9th September 2022].

STEP 8 – Upload all the other requisite documents;

STEP 9 – Click the ‘submit’ button;

[Importantly, once the ‘submit’ button is clicked, the applicant will not be allowed to modify/ edit any particulars in the table. Hence, it is advisable to go through the entire form thoroughly before clicking the ‘submit’ button].

STEP 10 – Click the ‘File’ button. Notably, TRAN 1/ TRAN 2 can be filed either using Digital Signature Certificate or Electronic Verification Code.

Importantly, after online filing/ revising TRAN 1/ TRAN 2, the applicant is required to submit the following documents to the jurisdictional officer –

  1. Self-certified copy of TRAN 1/ TRAN 2;
  2. Declaration in Annexure-A; and
  3. Copy of TRAN-3, if applicable.

The above submission is to be made within a period of 7 days from the date of filing/ revising TRAN 1/ TRAN 2 on the GST common portal.

Filing or revising TRAN 1 and TRAN 2 Document List

Documents required for filing/ revising TRAN 1/ TRAN 2 are –

  1. Declaration in Annexure-A;
  2. PDF copy of TRAN-3 in case the credit is claimed in table 7A of TRAN-1 (i.e., on the basis of the Credit Transfer Document);
  3. Any other requisite documents.

Filing or revising TRAN 1 and TRAN 2 : Key Pointers

Pointers for Filing or Revising TRAN 1 and TRAN 2

Prior to filing or revising TRAN 1 and TRAN 2, by following the steps prescribed above, the applicant should go through the below important pointers

  • The registered assessee who is wiling to revise TRAN 1 and TRAN 2 is facilitated to download the earlier filed TRAN 1 and TRAN 2 from the GST common portal.
  • Aggrieved registered assessee can filing or revising TRAN 1 and  TRAN 2 irrespective of whether the assessee has filed a writ petition before the High Court or whether the case of the assessee has been decided by ITGRC (Information Technology Grievance Redressal Committee).
  • Transitional claim in table 5(b) and table 5(c) of TRAN 1 is not allowed to be filed in respect of Forms C, Forms F and Forms H/I which are issued after the prescribed due date i.e. 27th December 2017.
  • While filing a transitional claim in TRAN-2, the applicant should file one consolidated form (instead of a tax period-wise form). Accordingly, the applicant should mention the last month of the consolidated period in the ‘Tax Period’ column.
  • Filing or revising TRAN 1 and TRAN 2 is the last opportunity for the taxpayer to claim the transitional credit. The taxpayer will have no further opportunity to file/ revise the transitional credit forms.
  • Importantly, if the registered person had earlier successfully filed a transitional claim in TRAN 1 and TRAN 2 which has been wholly or partly rejected. Then, the such a registered person should not revise/ file the same during the period 1st October 2022 to 30th November 2022.

Here, the registered person, instead of filing or revising TRAN-1/ TRAN-2, should prefer an appeal against the said rejection order or pursue any other alternate remedies prescribed under the law.

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CA Poonam Gandhi

About the author

Poonam Gandhi is a Chartered Accountant and a Lawyer. She is a Professional Freelance Content Writer/ Editor and an Educator.

She masters in creating result-oriented as well as Search Engine Oriented Content. Currently, she is associated with some of the topmost leading sites of India.

She holds more than 3 years of experience in the content field. Before entering the content writing field, she possessed a wide practice experience of more than 9 years, specifically, in the field of Indirect Taxation.

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