GST Transitional ProvisionsMigration of Credits, Registration & Pending Matters
Transitional provisions ensured smooth migration from the old tax regime to GST by preserving existing credits, handling pending matters, and managing job work goods and long-term contracts that straddled the July 1, 2017 transition date.
Key Transitional Provisions
Section 139 — Migration of Registration
Every person registered under existing law (VAT, Service Tax, Excise) deemed registered under GST. Provisional GSTIN issued, to be confirmed within prescribed time with required documents.
Section 140 — Transitional ITC
Eligible existing credit (CENVAT, VAT, Entry Tax) carried forward to GST via TRAN-1. Covers credit in returns, credit on capital goods, unavailed CENVAT on services, and credit on stock held.
Section 140(3) — Credit on Stock for Unregistered
Persons not registered under existing law but eligible for GST registration can claim deemed credit at prescribed rate on stock held on appointed day, subject to conditions.
Section 141 — Job Work Transition
Inputs/semi-finished goods sent for job work before appointed day — ITC available if goods returned within 6 months (extendable by 2 months). Finished goods must return within 6 months.
Section 142 — Miscellaneous Transitions
Covers refund claims filed under old law, appeals pending, goods returned within 6 months, price revision after GST, long-term contracts spanning GST date, and tax deducted at source.
TRAN-2 — Monthly Credit Claims
For deemed credit on stock (Section 140(3)), monthly filing of TRAN-2 required as goods are sold during the first 6 months. Credit claimed proportionate to stock cleared each month.
Transitional Forms & Deadlines
| Form | Purpose | Sections | Deadline |
|---|---|---|---|
| TRAN-1 | Main transitional credit declaration | 7 Tables | Within 90 days of GST (extended multiple times) |
| TRAN-2 | Monthly deemed credit on stock clearance | 2 Tables | Monthly for 6 months after GST |
| GST REG-26 | Provisional registration confirmation | Application form | Within 90 days of enrollment |
| GST REG-29 | Cancellation of provisional registration | Application form | Within 90 days if not confirming |
Frequently Asked Questions
What are transitional provisions in GST?
Transitional provisions (Sections 139-142 of CGST Act) are one-time mechanisms that facilitated the migration from the old indirect tax regime (VAT, Service Tax, Excise, Entry Tax) to GST. They covered registration migration, credit carry-forward, treatment of stock held on GST date, pending refunds/appeals, job work goods, and contractual obligations spanning the transition.
What is TRAN-1 and who had to file it?
TRAN-1 is the transitional credit declaration form filed by all registered persons migrating to GST. It declared: (1) closing balance of CENVAT/VAT credit from last return, (2) unavailed credit on capital goods, (3) credit on stock held for which invoices are available, (4) deemed credit on stock without invoices (for unregistered dealers). The deadline was extended multiple times, finally to March 31, 2020.
Can TRAN-1 still be filed or revised?
The Supreme Court in Union of India vs Filco Trade Centre (July 2022) directed GSTN to open the portal for filing/revising TRAN-1 and TRAN-2 for a limited window. As of 2024, the window has closed. Taxpayers who missed the deadline may approach the High Court or Grievance Committee for relief in exceptional cases of technical glitches.
How was credit on closing stock handled during GST transition?
Two paths: (1) If invoices were available (Section 140(3)) — full credit of taxes paid on inputs in stock, filed in TRAN-1. (2) If invoices were unavailable (Section 140(3) proviso) — deemed credit at 60% of CGST applicable on supply (later reduced to 40% for certain goods), claimed monthly via TRAN-2 as stock is sold over 6 months.
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