A Comprehensive Guide to Filing TRAN-2 on the GST Portal
This guide provides a detailed, step-by-step procedure for filing Form TRAN-2 on the GST portal, crucial for businesses transitioning to GST. It explains how to claim Input Tax Credit on pre-GST stock for which invoices were unavailable. The article covers recent updates regarding filing deadlines and outlines the specific information required for both central and state tax credit claims, emphasizing the importance of accurate data entry as the form cannot be revised post-submission. Successfully filing TRAN-2 ensures that eligible ITC is reflected in the Electronic Credit Ledger.
Upon the implementation of GST on July 1, 2017, numerous dealers previously unregistered under the older tax system became subject to GST registration due to updated turnover thresholds. These businesses often held stock, including raw materials, work-in-progress, or finished goods, on which they had already paid taxes under the prior regime. For taxpayers lacking invoices or documents to substantiate the tax paid on these inputs, filing Form TRAN-2 is mandatory. Before submitting TRAN-2, taxpayers must have completed Form TRAN-1 and the GSTR-3B return for the corresponding month. TRAN-2 submission is required monthly for sales of such stock until December 2017.
Latest Update on TRAN-1 and TRAN-2 Filing
As of October 1, 2022, the GST portal reactivated the option for taxpayers to file or amend previously submitted TRAN 1 and TRAN 2 forms, in accordance with a Supreme Court directive. This filing window was active from October 1, 2022, to November 30, 2022.
Detailed Procedure for Filing TRAN-2 on the GST Portal
Crucial Reminder: Before initiating these steps, confirm that both Form TRAN-1 and the GSTR-3B return for the relevant tax period have been successfully filed.
Step 1: Access the GST portal by logging in.
Step 2: Navigate to 'Services', then 'Returns', and finally click on 'Transition forms'.
Step 3: Select the 'TRAN-2' tab, choose the appropriate Financial 'year' and 'month' for your filing, and click 'Search'.
Step 4: Your GSTIN and legal/trade name will automatically populate. Below this, you will see two distinct blue tiles; select the one applicable to your situation to input details.
Detailing Stock Inputs Without Payment Proof (Section 4)
This section is designated for a stock-by-stock declaration of sales figures related to inputs held in stock, or incorporated into semi-finished or finished goods, which were subject to Excise duty or Additional customs duty under the previous regime, and for which ITC is permissible under GST. Important: You must have already reported 'details of inputs held in stock (where duty paid invoices are not available)' in part 7B of tile 7(a) of Form TRAN-1 to proceed with this tile. To add details, click 'ADD DETAILS'. Fill in all mandatory fields and then click 'SAVE'. You can 'edit' or 'delete' entries as needed. The required fields include:
- Quantity of Opening stock: The quantity of inputs held in stock on the first day of the tax period. This is a one-time entry for the initial month of filing and auto-populates for subsequent months.
- Quantity and Value of Sales: The quantity and value of sales made during the chosen tax period from the stock of inputs/semi-finished goods/finished goods held as of July 1, 2017, for which excise documents/invoices evidencing duty/tax payment are unavailable.
- Central Tax (CGST) or Integrated Tax (IGST) levied: The amount of Central Tax or Integrated Tax imposed on such sales.
- ITC Allowed: Manually input the eligible ITC amount. Refer to detailed calculations for TRAN-2.
- Quantity of Closing stock: This value is automatically computed based on the previously entered details.
Claiming State Tax Credit on Stock (For Single-Point VAT Systems) - Section 5
This section facilitates a stock-wise declaration of sales for inputs, or inputs within semi-finished/finished goods, that were subject to a single-point VAT system in specific states (e.g., Punjab), and where ITC is allowed under GST. Important: To access this tile, you must have previously declared 'details of inputs in stock not supported by documents' in tile 7(d) of Form TRAN-1. Click 'ADD DETAILS', complete all mandatory fields, and then click 'SAVE'. Options to 'edit' or 'delete' entries are available. The input fields here are identical to those in the previous step, with 'State/UT Tax' replacing 'Central Tax'.
Step 5: Click 'PREVIEW' to download a PDF summary for review before submission, ensuring all details are accurate.
Step 6: After verifying the draft, click 'SUBMIT' to finalize the form. Note: Once submitted, TRAN-2 cannot be modified or revised. A warning message will appear; click 'PROCEED' to continue. The form's status will then update to 'Submitted'.
Step 7: Choose to 'File with DSC' (Digital Signature Certificate) or 'File with EVC' (Electronic Verification Code) as preferred. Select the authorized signatory to verify the form. Upon successful filing, a confirmation message will display, and the status will change to 'Filed'. An email containing the ARN (Application Reference Number) will be sent to your registered email address. The total ITC claimed in the 'ITC Allowed' field will subsequently be credited to your Electronic Credit Ledger.
Impact of Filing TRAN-2
Upon successful filing of TRAN-2, the claimed Input Tax Credit (ITC) for both central and state taxes will appear in the Electronic Credit Ledger. It is crucial to remember that these ledger entries are updated only after the TRAN-2 form is officially filed, not merely upon its submission, which differs from the process for TRAN-1.