10 Key Takeaways of Draft Rules on Credit Transfer Document
There were lots of rumors afloat that Indian Companies planned to scale down their inventories ahead of GST rollout to limit their losses. Dealers were afraid of paying high GST rate without any claim to credit of excise in absence of duty paying document. The all-powerful GST council intends to introduce “Credit Transfer Document” which will allow them to take credit of duty paid under earlier law subject to some conditions. Moreover, it has also been decided to bring amendment to CCR Rules, 2004 to make Credit transfer document as eligible document for claiming credit.
The key takeaways of these draft rules on Credit Transfer Document are:
- A registered manufacturer registered under Excise law can issue “Credit Transfer Document” (CTD) which will be sufficient evidence of payment of excise duty on goods manufactured and cleared before the appointed date. However, it must be issued only to person who was unregistered person under Excise Law but he is registered under the CGST Act, 2017.
- CTD will be issued if the value of such goods is more than Rs 25,000 per piece and it bears the brand name of manufacturer. Also, it must be identifiable as a distinct number such as engine number of car.
- CTD shall be serially numbered and would contain the excise registration no., address of concerned department, name, address and GSTIN no. of dealer, description, classification, invoice no., rate, quantity, duty and other specified details.
- The person issuing CTD shall be liable to maintain records of every piece or item of such goods for which CTD is issued and such record shall be made available to Excise Officer for verification on demand.
- It is the responsibility of person who is issuing CTD to ensure that the dealer to whom CTD issued is in possession of such goods in the form in which those goods were cleared.
- CTD shall be issued upto 30thJuly, 2017 and copy of invoice shall also be enclosed with CTD.
- The dealer who wants to use CTD to claim credit shall maintain copies of all invoices relating to buying and selling, even if made through intermediate dealer.
- The dealer availing of credit using CTD shall not be eligible to avail of credit under rule 1(4) of Transition Rules on identical goods manufactured by same manufacturer available in the stock.
- The person issuing CTD shall be jointly and severally responsible for excess credit availed by the dealer and shall be liable for recovery of such credit, interest and penalty under CCR Rules, 2004.
- The person issuing CTD and person availing of credit using CTD shall submit details in table 1 and table 2 of Form – TRANS 3, respectively, within 60 days from the appointed date.