For the purpose of proper transition to GST, transfer of ITC lying under pre-GST regime to GST regime was a prerequisite. Taxpayers need to file TRAN-1 and TRAN-2 for this purpose. Initially, government offered a sunset date beyond which taxpayers were not allowed to transfer unutilised ITC.
However, due to technical glitches at the GST portal, many taxpayers failed to file such forms by due date. Hence, the due date got further extension for filing GST TRAN-1 and GST TRAN-2. The new dates to file TRAN-1 and TRAN-2 are 31.03.2020 and 30.04.2020 respectively.
Rule 117(1A) of CGST Act 2017-
“[(1A) Notwithstanding anything contained in sub-rule (1), the Commissioner may, on the recommendations of the Council, extend the date for submitting the declaration electronically in FORM GST TRAN-1 by a further period not beyond 7[31st March, 2020], in respect of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and in respect of whom the Council has made a recommendation for such extension.]”
For this purpose, GST council recomended IT Grievance Redressal Mechanism to address the difficulty faced by the taxpayers due to technical reasons.
1. Issues Involved With Filing TRAN-1 and Tran-2
The Central Board of Indirect Tax & Custom (CBIC) has released its recent circular to curb the technical issues the taxpayers are facing on the common portal while claiming the Transitional Credit.
As the circular states, CBIC has released the circular to ensure that the field formations follow an uniform procedure where, they will first thoroughly examine the representations filed by the taxpayers and only after that it will be forwarded to the Goods and Service Tax Network(GSTN).
Sanjay Mangal, Commissioner of GST, released the circular in the interest of all the Principal Chief Commissioners or Chief Commissioners of Central Tax. The topic of this circular pertained to several principles of uniformity the council introduced at the Central Goods and Service Tax (CGST) Rules, 2017.
Additionally, the circular talks about the Revenue Tax Grievance Redressal Mechanism. The mechanism came to existence with the recommendation of the GST Council. Its job is to deal with grievances of the taxpayers relevant to the glitches.
2. Issues The Commissioner of GST Raised
As per the circular, the nodal officers were not able to follow the policy suggested in the Standard Operating Procedure(SOP) released on 12.04.2018 by the Goods and Service Tax Network.
Following issues related to TRAN-1 and TRAN-2 were appearing on recurring basis:
- In most of the cases, officers have forwarded the representations they receive from the Taxpayers without proper verification and without having the needful documents.
- The GSTN has also found out that in some instances, officers except the Nodal Officer himself have sent the cases. They did not even obtain approval from the Commissioner or Principal Commissioner.
- In some cases, filed officers have forwarded applications in the form of physical copies and without following SOP.
Due to these oversights, the Goods and Service Tax Network couldn’t process the representations within time.
Commissioner of GST has also notified that GSTN has presented the technical analysis of the cases they got till 31st March.
GSTN has asked all the Nodal Officers to examine or scrutinize the rest of the representations before forwarding.
3. Guidelines Suggested by Goods & Service Tax Network
GSTN has suggested that, nodal officer should follow following procedure for the remaining representations:
- Officers need to check if there is a proven technical glitch. And that’s the reason why taxpayer couldn’t file the prescribed form on the common portal within the deadline.
- Application should contain evidence to prove that the taxpayer has bonafidely attempted to file GST TRAN-1 by 27.12,2017.
- Nodal officer of centre/state shall forward this application to GSTN Nodal officer. But only after having of all documents and obtaining prior approval of jurisdictional commissioner/principal commissioner.
- Compiled information is to be given in prescribed format.
- After receiving the details from the designated Nodal officer of Centre/State, the GSTN Nodal officer will get it investigated with the technology team. Then the officer will represent the analysis to the IT Grievance Redressal Committee.
- The GSTN will apply the decision taken by the IT Grievance Redressal Committee.
- GSTN Nodal officer shall inform the Nodal officer of centre/state about the decision or directions of IT Grievance Redressal Committee.
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