Form GST TRAN-1 can be filed up to 30th June 2020 ??

Recently the Delhi High Court gave a judgement in the case of Brand Equity Treaties Ltd that the time limit to file TRAN-1 prescribed under Rule 117 of CGST Rules 2017 is directory in nature and therefore TRAN-1 can be filed & CENVAT can be availed within the residual clause of the limitation Act i.e 3 years time period from the Appointed date i.e 30-06-2020.  Click here to download Judgement Copy

So can we file TRAN-1 now? Can this judgement can be applicable on PAN India basis? In this article we are discussing the analysis and observation made by the honorable delhi high court. We are also discussing some basics about TRAN-1 so that you can understand the entire picture of the judgement.
  • On 1st July, 2017, the new indirect tax regime GST was introduced in the country. 
  • CGST Act introduced transitionary provisions to enable the taxpayers to migrate from the old indirect tax regime (Excise/VAT/Service tax) to the new GST regime.  
  • The transition from the old regime to GST for the availment of the CENVAT credit (input credits available on the stocks held as on 01-07-2017) was to be by way of a declaration to be submitted electronically in Form GST TRAN-1.  
  • The date prescribed for filling TRAN-1 was given in Rule 117 of CGST Rules 2017 which was initially 90 days but the same was extended several times by way of orders/notifications from time to time and finally till 27/12/2017.  
  • However, there was several taxpayers who could not meet the deadline due to several technical glitches.  
  • Thousands of taxpayers complained that there was low bandwidth and despite several attempts being made on the GST Network, they were unsuccessful in filing the statutory GST TRAN-1 Form online.  
  • The technical difficulties faced by the taxpayer were acknowledged and an IT Grievance Redressal Committee was constituted and they assigned the task of redressing the grievance of the taxpayers.  
  • Several cases got settled at the government level, however some cases were contested on the ground that taxpayers did not put forward any evidence to suggest that they faced any technical glitch on the portal that prevented them to submit the GST TRAN-1 Form within the prescribed time limit whom the Council has made a recommendation for such extension  
  • Then the Government vide Notification 48/2018-CT dated 10th September, 2018, t inserted Sub-rule (1A) to Rule 117, which gave power to the Commissioner to extend the date for submitting the declaration in Form GST TRAN-1 (not beyond 31st December 2019), in respect of taxpayers who could not submit the said declaration on account of technical difficulties on the common portal.  
  • However, many taxpayers still facing challenges, and a lot of cases were filed in the different courts of the country.  
  • The high court concluded that this Rule 117 is directory in nature. Further, as per section 140, which is guiding & governing section for transfer of transitional credit to the GST regime, there was no specific time limit prescribed . There by it is being stated that Rule 117 is directory in nature. If you could not submit TRAN-1 within the stipulated time given under Rule 117, there will not be forfeiture of your right but obviously it can not go to perpetuity. It should be taken within the residual clause of the Limitation Act i.e within 3 years time from the appointed date (1-07-2017) ie. 30th June 2020.  
  • When you go to the concluding para (22 & 23) of the Judgment. It is saying that even a similarly placed taxpayers who attempted to file but could not file TRAN-1 or who have filed but their credit is not reflected in their return should be given an option and the department must allow to open the online portal for them.  
  • There fore, all such taxpayers who attempted to file but their credit is not reflecting or who attempted to file but couldn’t succeed because of technical reasons, they can now submit their TRAN-1 on or before 30-06-2020 which is 3 years as per residual clause of the Limitation Act.
 Is the judgment applicable to PAN India?
  • The judgment is applicable for the petitioner and without any doubt it will be applicable within the jurisdiction of Delhi. 
  • There is already a contrary judgment by the Bombay High court in case of Nalco Ltd in which the court said the Rule 117 does not ultra vires the act and therefore the time limit given under Rule 117 need to be followed.  
  • Since we have already 2 contrary judgments by the 2 different high courts, the Delhi high court judgment can not be said to be applicable on PAN India basis. Definitely the case will go to the Supreme Court and therefore we need to wait for the Supreme Court’s Judgment to implement it on PAN India Basis.

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[Disclaimer:-This article is being furnished for informational purposes only. We make every effort to use reliable & comprehensive information, but we do not represent that the contents of the article are accurate or complete.]

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  1. The article was up to the point and described the information very effectively. Thanks to blog author for sharing an informative post. GST netfile

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