Businesses not previously registered may need to enroll under GST due to its broader turnover limits. As of July 1, 2017, when GST was implemented, these unregistered dealers might possess inventories of raw materials, work-in-progress, or finished goods. Although not registered under the former tax system, these businesses likely paid taxes on their purchases. Form TRAN-2 is therefore required for dealers lacking invoices or documents to prove tax payments on their inputs. Before submitting TRAN-2, taxpayers must file Form TRAN-1 and GSTR-3B for the applicable month. This form must be filed for each month through December 2017, covering the sale of such stock.

Prerequisites for the TRAN-2 Offline Tool

To download the TRAN-2 offline tool, taxpayers need specific system requirements. These include a device running Windows 7 or a newer version, along with MS Excel 2007 or a more recent iteration.

Steps to Download and Install the TRAN-2 Offline Tool

The TRAN-2 offline tool can be obtained through two methods: either by logging into your GST portal account or by downloading it directly without authentication. Both procedures are detailed below.

Pre-login Download

Step 1: Access the official GST portal. The main page of the GST website will appear.

Step 2: Navigate to 'Downloads', then 'Offline Tools', and select 'TRAN-2 Offline Tools'.

Step 3: Locate and click the 'Download' links corresponding to two distinct sections. The first is 'TRAN-2 Inputs held on stock (central) Excel template', which pertains to Section 4 of Form TRAN-2. The second is 'TRAN-2 Credit on state tax on the stock Excel template', relevant for Section 5 of Form TRAN-2, specifically for states with a single-point VAT system originating from Section 4. Following this, click 'Proceed' to initiate the file download.

Step 4: Choose and specify the desired save location for the downloaded files on your device.

Post-login Download

Step 1: Sign in to the GST portal. The primary GST webpage will be shown.

Step 2: Go to 'Services', then 'Returns', and select 'Transition Forms'. Click on the 'TRAN-2' tab.

Step 3: Choose the appropriate year and month from the provided drop-down menu, then click 'Search'.

Step 4: Click the tile labeled '4 – Details of input held on stock on appointment date which he is not in possession of any invoice/document evidencing payment of tax carried forward to Electronic Credit ledger'.

Step 5: An 'Important Note' will appear. The second item contains a link for downloading the tool; select 'Click Here'. In a similar manner, the Excel template for 'Tran – 2 Credit on State Tax on the stock' can be downloaded after logging into the GST portal.

Installing the Tool

Step 1: After downloading the TRAN-2 offline tool, decompress and extract the contents from the zipped folder. This folder will contain an Excel file; double-click it to open.

Step 2: Upon opening the Excel sheet, activate the content by clicking 'Enable Content'.

Steps to Prepare TRAN-2 Using the Offline Tool

The TRAN-2 offline tool offers two downloadable templates, as previously detailed. If you have numerous records for sections 4 and 5 of TRAN-2, these Excel templates are useful for data entry and JSON file generation. Below are the steps for populating the 'TRAN-2 Inputs held on stock (central) Excel template'.

Step 1: Open the downloaded 'TRAN-2 Inputs held on stock (central) Excel template'. Proceed to the 'GST_TRANS2_Central' worksheet.

Step 2: Input your GSTIN into the designated GSTIN field.

Step 3: Populate the remaining relevant columns within the Excel tool. Key guidelines include:

• All fields denoted by a red asterisk (‘*’) are compulsory and must be filled.
• Specify the applicable tax period.
• The HSN code must be numerical and not exceed eight digits.
• Either the HSN code or the description must be provided.
• Units of Quantity Code (UQC) can be chosen from a drop-down list.
• Numerical values are required for opening stock quantity, outward supplies quantity, value, Central Goods and Services Tax (CGST), Integrated Goods and Services Tax (IGST), Input Tax Credit (ITC) allowed, and closing quantity.
• The closing balance quantity will automatically be calculated as the opening stock quantity minus the outward supply quantity, irrespective of manual entry.
• The permissible ITC should not surpass 60% of the CGST amount.
• Similarly, the allowed ITC should not exceed 30% of the IGST amount.
• To add a new record or modify an existing one for the GST portal, select 'Add' under the 'Action' column.
• To remove an existing record, select 'Delete' under 'Action'.
• If inserting a new row between existing ones, first select all rows below your intended insertion point, then cut and paste them one row lower to create space for the new data.

Step 4: After completing all data entries, click the 'Validate & Calculate Sheet' button to verify the worksheet's accuracy.

Note: The 'Closing Balance' (calculated as Quantity of Opening Stock for the Tax Period minus Quantity of Outward Supply Made) is computed automatically when you click 'Validate & Calculate'.

Step 5: Should the validation be successful, a message will appear indicating the number of records designated for addition and deletion on the GST portal. Click 'OK'.

Note: To remove a row containing an error, select the entire row and press the 'Delete' key. Subsequently, select all rows beneath the deleted row, then cut and paste them into the position of the removed row.

Step 6: If validation fails, errors will be listed in the 'Error' column. You must correct all errors and then re-click the 'Validate & Calculate Sheet' button to re-validate the worksheet. A blank 'Error' column indicates successful validation for that row. The same process applies for filling data and uploading JSON using the 'TRAN-2 Credit on state tax on the stock Excel template'.

Steps to Generate the JSON File for Upload

Step 1: Within the Excel template, click the 'Create File to Upload' button to generate the JSON file intended for submission to the GST portal.

Step 2: Browse to your preferred directory for saving the JSON file. Provide a file name and click 'Save'.

Step 3: A confirmation message will confirm the JSON file's creation. Click 'OK'.

Steps to Upload the JSON File

Step 1: Access the GST portal by logging in. The main GST page will be presented.

Step 2: Navigate through 'Services' to 'Returns', then 'Transition Forms'. Select the 'TRAN-2' tab.

Step 3: From the drop-down menu, choose the applicable year and month, then click 'Search'.

Step 4: Click on the tile titled '4 – Details of Input held on stock on appointment date in respect of which he is not in possession of any invoice/document evidencing payment of tax carried forward to Electronic Credit ledger'.

Step 5: Activate the 'Choose File' button.

Step 6: Locate and select the JSON file from your device that is ready for upload. Click 'Open'.

Step 7: The uploaded JSON file will undergo validation and processing. If processing encounters validation errors, a link will be provided on the GST portal to download a CSV file detailing these errors.

Step 8: After downloading, open the error file to view the reported issues. Correct any inaccuracies in the JSON file and re-upload it to the GST portal. If no errors are present, a confirmation message stating 'All records in the JSON file is saved in our database successfully' will appear. The process for uploading data for 'Tran-2 Credit on State Tax on the stock' is identical.

Step 9: Following data upload, click 'Preview' to download a PDF summary. Review this draft for accuracy before finalizing the submission. After your review, click the 'Submit' button to lock the form. A warning message will appear; click 'Proceed' to continue. The TRAN-2 form's status will then update to 'Submitted'.

Note: Submitted forms cannot be modified or revised.

Step 10: Choose between 'File with DSC' (Digital Signature Certificate) or 'File with EVC' (Electronic Verification Code) based on your preference, and select the authorized signatory to sign or verify the form. Upon successful filing, a message will confirm the submission, and the status will update to 'Filed'. An email containing the ARN (Acknowledgement Reference Number) will be dispatched to your registered email address.