Transition to GST could be a cumbersome process if preparations are not started immediately. VAT/Service tax taxpayers should complete the GST migration. Know more about GST Transitional Provision at https://cleartax.in/s/transition-to-gst/

1. Transition Provisions

2. If You Are Registered under the Old Regime
Registered Person
Normal Registered
person (eligible to claim ITC)
Registered person
(Composition Scheme)
Unregistered Person
TRANSITION
UNDER OLD REGIME UNDER GST REGIME

3. Transition Case 1 - Registered Person under the Old Regime to Normal
Registered Person under GST Regime
• Every person registered under old regime must migrate to GST system
• The closing balance of the CENVAT credit/VAT in the last returns filed under the old law
can be taken as ITC under GST provided the following conditions are satisfied:
• Declaration in FORM GST TRAN-1 to be filed electronically specifying the details of stock held
on 1.7.2017
• The said amount of credit is admissible as ITC under GST
• The registered person has furnished all the returns required under the old laws for the period
of 6 months immediately preceding 1st July 2017
• The said amount of credit does not relate to goods manufactured and cleared under such
exemption notifications as are notified by the Government

4. • The balance installment of unavailed credit on capital goods credit can also be taken by making the
requisite declaration in GST TRAN 1
• Such registered person must issue Tax Invoice under GST Act from 1st July 2017
• The amount & the type of GST must be separately indicated in the Tax Invoice issued
• GST is to be collected from the recipient of supply at the rate prescribed (CGST & SGST in case of
intra-state supply ; IGST in case of inter-state supply)

5. In this situation, if the person was registered under the old regime
under ‘Composite Scheme’ then:
• They are eligible for tax credit contained in the inputs in stock & in respect of
inputs contained in semi-finished/finished goods in stock on 1.7.2017 subject to
following conditions:
• such inputs or goods are used or intended to be used for making taxable supplies under GST
• the said registered person is eligible for ITC on such inputs under GST
• the said registered person is in possession of invoice or other prescribed documents evidencing
payment of duty under the existing law in respect of inputs and it is not issued prior to 1.7.2016
• the supplier of services is not eligible for any abatement under this Act
• stocks stored should be easily identifiable
• the said registered person makes declaration in FORM GST TRAN-1 specifying the details of stock
held on 1.7.2017

6. • Any taxpayer registered under old regime who wishes to migrate to the GST system and opt for
the Composition Scheme, must give an intimation in the FORM GST CMP-01, not later than 30
days from 1st July to avail Composition Scheme
• Such taxpayers will not be eligible for ITC on existing stocks of inputs, semi-finished goods and
finished goods in stock on 1.7.2017 as well as on fresh inward supply of inputs, input services and
capital goods
• Such taxpayers must issue only Bill of Supply & cannot issue Tax Invoice for outward supplies
• Tax must be paid from their own pocket at the rate of 5% in case of restaurants (other than those
serving liquor), 2% in case of manufacturer (other than ineligible manufacturers) and 1% in case of
other supplies (not for services) of turnover
• No GST can be collected from recipient of supply
Transition Case 2 - Registered Person under Old Regime to Composite Levy
under GST Regime

7. Transition Case 3 - Registered Person under Old Regime to Unregistered
Person under GST Regime
• Any taxpayer registered under old regime who does not wish to migrate to the GST system must
apply for cancellation of registration if they are no longer liable to be registered under GST
• Such taxpayers will not need to collect & pay GST
• Such taxpayers will not be able to avail ITC on inward supplies as well as the stocks of inputs, and
inputs contained in semi-finished goods and finished goods in stock on 1.7.2017
Note: Input credit relating to inputs as such or input contained in the semi-finished goods/finished
goods is required to be worked out and paid to the Government using credit lying in balance.

8. If You Are Unregistered under the Old Regime
Unregistered Person
Normal Registered
person (eligible to claim ITC)
Registered person
(Composition Scheme)
TRANSITION
UNDER OLD REGIME UNDER GST REGIME

9. Transition Case 4 - Unregistered Person under Old Regime to Normal Registered
Person under GST Regime
• A taxpayer unregistered under the earlier regime, who wishes to register under GST must
apply for a new registration in Form GST REG-1
• Eligible for tax credit contained in the inputs in stock & in respect of inputs contained in
semi-finished/finished goods in stock on 1.7.2017 subject to the following conditions:
• such inputs or goods are used or intended to be used for making taxable supplies under CGST Act
• the said registered person is eligible for ITC on such inputs under CGST Act
• such invoices or other prescribed documents were not issued prior to 1.7.2016 (if he has the
invoices)
• the supplier of services is not eligible for any abatement under this Act
• a declaration is made in the FORM GST TRAN-1 specifying the details of stock held on 1.7.2017

10. Unregistered person under old law who is engaged in the manufacture of exempted goods or provision of exempted services/
providing works contract service/first stage dealer/a second stage dealer/registered importer/depot of a manufacturer
Is in possession
of invoice/other
documents
evidencing
payment of duty
& it must not be
earlier than 12
months
immediately
preceding the
July 1st
Is not in possession of invoice/other
documents evidencing payment of duty
100%
Eligible
Manufacturer or service
provider
Other than
manufacturer or service
provider
Not eligible *Eligible when the goods are sold
*The scheme is operative only for
six months from the appointed day
*The statement of supply of such
goods must be submitted in each
of the 6 tax periods in Form GST
TRAN-2
If SGST/CGST > =
18%
If SGST/CGST < 18%
If IGST> = 18%
If IGST< 18%
60%
40%
30%
20%
Eligibility of the ITC on the Duty-Paid Goods In Stock on July 1st
% Eligible

11. With respect to persons who were engaged in the manufacture of taxable as well as
exempted goods or provision of taxable as well as exempted services in the old
regime:
• Input Tax Credit of CENVAT/VAT in respect of input, semi-finished and finished goods in stock
attributable to exempted goods or services under old regime which are now taxable can also be
taken in the same manner discussed previously

12. • Such taxpayers must apply for a new registration in Form GST REG-1 and give intimation in FORM
GST CMP-01 not later than 30 days from 1st July to avail Composition Scheme
• Not eligible for ITC on existing stocks of inputs, semi-finished goods and finished goods in stock on
1.7.2017 as well as on fresh inward supply of inputs, input services and capital goods
• Must issue only Bill of Supply & cannot issue Tax Invoice in respect of outward supplies
• Tax must be paid from his own pocket at the rate of 5% in case of restaurants (other than those
serving liquor), 2% in case of manufacturer (other than ineligible manufacturers) and 1% in case of
other supplies (not for services) of turnover
• No GST can be collected from recipient of supply
Transition Case 5 - Unregistered Person under Old Regime to Composite
Scheme under GST Regime

13. How to File FORM TRAN-2
• Must be submitted at the end of each month for a period of 6 months from 1st of
July.
DETAILS TO BE PROVIDED
• Opening stock of the goods for the tax period along with their HSN Codes
• The details of outward supply made (quantity, value, CGST/SGST or IGST)
• Closing stock of the goods for the tax period
• ITC allowed with respect to the goods sold in that tax period

14. Transition Provision With Respect to ITC
INPUT/INPUT SERVICES IN TRANSIT
There might be a scenario where input or input services are received on or after the 1st
July but the duty or tax on the same was paid by the supplier under the old law.
• Registered person may take credit of eligible duties and taxes, provided the invoice has been
recorded in the books within 30 days from 1st July. The period can be extended by the
Commissioner GST by another 30 days
TRANSITION 1ST JULY
Tax on inputs or input
service paid prior to
1.7.2017
Inputs or input services
received
after 1.7.2017
Contd.

15. • A statement of such invoices have to be furnished
• ISD can also distribute such credit
ITC In Case Of Centralized Registration under Service Tax
• Such registered persons can take credit of the amount of CENVAT carried forward in return
furnished under the old law, if the original/revised return under the existing law has been filed
within 3 months
• Such credit may be transferred to any of the registered persons having the same PAN for which
the centralized registration was obtained
• Said amount should be eligible as ITC under GST

16. Reclaiming the Reversed Input Service Credit
CENVAT credit reversed on account of non-payment of consideration within 3
months can be reclaimed if the payment is made to the supplier of service within 3
months from the 1st July.

17. If price increases, then a registered person will issue a
supplementary invoice or debit notes within 30 days from the date
of revision and such revision shall be treated as supply under GST,
and tax is payable under this Act.
Price Revision In Respect of Existing Contracts
U
P
W
A
R
D
D
O
W
N
W
A
R
D
If price decreases, then a registered person may issue credit note
within 30 days from such revision and credit note shall be deemed
to have been issued in respect of outward supply made under this
Act. A registered person will reduce his tax liability for such credit
note, subject to reversal of credit by the recipient.

18. • Let’s assume that inputs, semi-finished goods or finished goods were sent to the job worker
without payment of duty/VAT under the existing law. No GST is payable by the job worker if such
goods are returned by him within 6 months from the 1st July
• The period can be extended by the Commissioner by another 2 months
• The manufacturer and the job worker declare the details of the inputs or goods held in stock by
the job worker on behalf of the manufacturer on the 1st July in FORM GST TRAN-1
• If not returned within the prescribed period, then ITC shall be liable to be recovered from the
principal as an arrear of tax and amount so recovered will not admissible as ITC
• In case of semi-finished goods, the manufacturer may transfer the semi-finished goods/ finished
goods for the purpose of supplying there from on payment of tax in India or without payment of
tax for exports
Transition Provisions Relating to Job Work

19. Transition Provisions Relating to Goods Returned/Sent on Approval etc.
• This pertains to all goods sent on approval basis before 6 months of 1st July but
returned/rejected within 6 months from the appointed day (1.07.2017). No tax is
payable by the person returning the goods
• Commissioner may extend the period by 2 months
• If returned after that, tax is payable by the recipient if the supply is taxable under
GST
• If not returned, tax is payable by the person who sent the goods on approval basis

20. How to File FORM TRAN-1
REGISTERED UNDER OLD REGIME
• Need to be filed by 28th September 2017
• Need to file to carry forward the Input tax credit to the GST regime
• Tax period to which the last return filed under the old
law & the date of filing
• Closing balance of CENVAT credit or input VAT in the
above mentioned return
• Registration No. under the old regime
• Details of C-Form, F-Form & H/I Form (VAT dealer who
has cleared his goods through the statutory form)
• Details of capital goods (CG) & the amount of unavailed
CENVAT credit(balance of 50%) in respect of CG
UNREGISTERED UNDER OLD REGIME
• Details of inputs held in stock or inputs
contained in semi finished or finished goods
held in stock as on 1st July
• HSN codes of the goods held in stock
• Quantity, value & eligible duties on such
stock
DETAILS TO BE GIVEN

21. In Case of Job Work
• Declaration to be made by both the
principal manufacturer & job worker
• Details of the stock held by job worker:
• Challan No.
• Challan date
• HSN code of goods
• Quantity
• Value
In Case of Goods Sent on Approval Basis
• Document No. & date
• Details of the stock sent:
• Name, address & GSTIN of recipient
• Challan date
• HSN code of goods
• Quantity
• Value
• Service Tax registration number
• Tax period in which the last return was filed under the old law & the date of filing
• Closing balance of CENVAT credit or input VAT in the above mentioned return
• GSTIN of the receiver (having same PAN)
• ITC transferred
In Case of Centralized Registration