Transition Provisions under GST

1. Hi Everyone,
GST beingthe Buzz wordall aroundthe
Industry,Ithoughtof sharingsome
quickinsightsforthe benefitof this
community:
Amongall the sectionsunderthe Model
GST law,Transitionprovisionsare the
mostcritical and importantareato be
lookedinto.Governmentbeingfirmon
goinglive from1st Apr2017, it isveryimportantthat we getourselvesupdatedasearlyaspossible
withthe provisions.Beloware some keypointswithrespecttoTransitionprovisionsunderGST:
1. Tax creditcan be carried forwardunderthe GST onlyto the extentwhichgetsreflectedinthe
Tax returnfiledunderthe earlierLaw (i.e LawsexistingbeforeGST) forthe periodendingonthe
day immediatelyprecedingthe appointedday.
Very important,it meanstheamountof Tax credit shown in thereturn filed forperiod ending on
31st Mar2017 (Assuming GSTis applicable from1st Apr'17) can only be carried forward under
GST. Hence it becomesvery importantin termsof accuracy/Completenessof thetax returnsto be
filed till 31st Mar'17
2. Pendingrefundclaimstobe disposedoff underearlierLaw
That meansall the claimsfor refundwill be clearedonlyasperearlierlaw andwill be settledin
cash and will notbe creditedtoElectroniccreditledger.Hence the litigation'sandcorruptionwill
continue asper earlierlegislation.
3. Claimof Tax creditto be disposedoff underearlierLaw
If the resultof claimcomesas Credit,thenitshall be settledincashas perearlierLaw.,andIn
case the resultof claimcomesas recovery,thenitshall be recoveredasperGST Law. (Very
important).i.e.Recoverywillbe done asif itwas an arrears of tax underGST Law itself.
4. Finalizationof proceedingsrelatingtooutputdutyliability
Thisis similartopoint3 above.It relatestoall the proceedingsstartedbefore the appointed
date.If the resultisrecovery,thenthe amountshall be recoveredasif itwasan arrears under
GST Law and in case the resultisrefund,thenthe amountshall be disposed off inCashasper
earlierLaw..(Same storyof corruptionandharassmentto continue)
5. Treatmentof longtermconstruction/ workscontracts
Goods/Servicessuppliedonorafter appointeddate,inrelationtothe contract enteredinto
priorto the appointeddate,the tax shall be collectedasperthe GST Law
Very importantforthe industry sincethe agreementand price negotiationsshould bemade
keeping in mind theprovisionsof the GST Law.
6. Progressive orperiodicsupplyof goodsorservices

2. No tax shall be payable onthe supply of goodsand/orservicesmade onor afterthe appointed
day if:
Considerationreceivedpriortothe appointeddayand
Duty/Tax has alreadybeenpaidunderearlierLaw
Thatmeansin all othercases the tax shall bepayableunderGST Law.
7. Treatmentof retentionpayments
No tax shall be payable onthe supplyof goodsand/orservicesmade before the appointedday
where:
Part considerationforthe saidsupplyisreceivedonorafterthe appointedday
But the full dutyor tax payable onsuch supplyhasalreadybeenpaidunderthe earlierlaw.
Thatmeansin all othercases the tax shall bepayableunderGST Law.
8. Creditdistributionof service tax byISD(InputService Distributor)
Inputtax credit(ITC) onaccount of anyservicesreceivedpriortothe appointeddaybyan Input
Service Distributorshall be eligible fordistributionascreditevenif the invoice(s) relatingtosuch
servicesisreceivedonorafterthe appointedday.Some relief giventothe ISD'sas there will not
be double taxationonthe distributedpartof the inputtax creditpostthe appointeddate
These are some keypointsrelatedtoTransitionprovisions,pleasedocommentandprovide your
valuable feedback.Please letme knowforanyrelatedqueries/clarifications,Iwouldbe more than
happyto assistyou.
Regards,
CA GovindChomal
9673378777