Adv Sherry Samuel Oommen is a practising lawyer at High Court of Kerala who specialises in tax and Corporate Laws. Presently he heads the tax and corporate law practice of Nash Capital Partners. Apart from being a qualified lawyer, he is also a chartered accountant, cost accountant and a company secretary. He is currently pursuing his Doctorate Degree and is reachable at sherryoommen@nashcp.com.
1) ITC with respect to tax payable under Reverse Charge Mechanism (‘RCM’): or the vendor payments made in June 2017, which are liable to Service tax under RCM as per Service tax law, it is recommended to discharge Service tax liability within June 2017 to ensure availability and disclosure of related ITC in the month of June 2017 itself. This is in absence of any relevant transition provision for availing credits in respect of Service tax payments made under RCM post appointed date i.e. the day on which the GST law would come into force.
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2) Input/ Input services in transit: Any inputs/ input services received after GST but on which duty/ tax has already been paid under earlier tax regime, ITC can be claimed under GST if the invoice/ duty or tax paying document is recorded in the books of accounts within a period of 30 days after GST. Accordingly, please ensure
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CENVAT credit reversed on account of non-payment of consideration within three months can be reclaimed if the payment is made to the supplier of service within 3 months from the appointed day.
that all such transactions where tax has already been paid by vendors should be duly accounted for in books by 30th July 2017. 3) Closing balance of ITC in the last returns: In order to carry forward of ITC from the tax returns filed under the existing tax regimes (viz. Service tax, Excise, VAT), please ensure the following: • To file returns for the previous last six months under the existing law • To furnish declaration in form GST TRAN 1 within 90 days from the appointed day • Ensure collection of all pending statutory forms (like Form C, H, I, F). This is because in respect of utilized VAT credit, the same can be carried forward only when the same is substantiated with relevant declaration forms pertaining to said credit. However, in case Forms are not available, then VAT ITC corresponding to such transaction
(where forms are not available) may be denied and a refund may have to be claimed at a later stage (when forms are available). 4) ITC on duty paid stock : In respect of goods lying in stock as on June 30, 2017, the following credits can be carried forward under GST subject to fulfilment of prescribed conditions including submission of declaration in Form GST TRAN 1 (in respect of goods purchased in preceding 12 months): • VAT credit will be available in full (based on the VAT invoice) and will be adjusted against SGST • Excise / CVD Credit - If Duty paying documents (Excise invoice/ Bill of Entry) is available, then full credit will be available. In absence of duty paying document, credit would be available only to the extent of 60%/ 40% of CGST payable post sale of goods (30%/ 20% in case of IGST) 5) Reclaim the reversed Input Service credit: