GST India - TRAN-2

[Altamush Zafar]

Only few days left to file the TRAN-2 form. The taxpayers need to know some essential points which are often being ignored regarding the form:

1. The form is only for traders.
2. It is only for traders who were unregistered in VAT.
3. The benefits of credits received are to be passed on by way of reduced pricing. This doesn't just mean that the benefits are to be passed on, it also means that details of all the tax payers who have filed this form will be sent to the Anti- Profiteering Committee and the tax officials will surely pay you a visit if it is a substantial amount.
4. The document of procurement is required to avail the credit. This document may or may not be a tax invoice under previous tax laws.

The form TRAN-2 should be filed very judiciously. The tax payer should determine whether its benefits outweigh its conditions. In case it is found by the authorities that incorrect claims were made then credits will be reversed along with interest. Penalty can also be levied but it will be at the discretion of the officer.

There are many other conditions for TRAN-2 but above points were the ones which I found were being overlooked by tax payers at large.

Discussions to this article

[Ganeshan Kalyani]

tran2 to be filed on or before 31.03.2018. there is one more confusion in it. when the credit of 40%/60% was to be given after payment of tax and filing of tran1 than then option in tran1 in serial 7 of whether having duty paying document- 'yes' or 'no' should not have given.

[Ganeshan Kalyani]

nevertheless nice article and timely written. it will be an alarm to the querist. thanks.

[Ashwarya Agarwal]

Sir in my opinion, there is no such condition that "It is only for traders who were unregistered in VAT."

[Altamush Zafar]

The availment of credit through TRAN-2 is allowed through proviso to section 140(3). Section 140(3) is for certain specific persons and those who were not liable to be registered under previous laws (meaning not registered). Therefore the proviso will be read subject to the section except for the sole condition written in the proviso (non availability of documents evidencing payment of duty).