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December 30, 2022
By
Swathi v prabhu

What is a credit transfer document in GST?

If a dealer who was not registered under the Excise act receives goods cleared before 1st July 2017, then under the GST regime, the manufacturer is required to issue a credit transfer document in all such cases. Let us learn about the process, issue, and conditions for issuing a credit transfer document in GST. But before that, let us first understand what a credit transfer document is in GST.

What is a credit transfer document?

A credit transfer document is a form issued by the manufacturer of goods, as evidence against payment of excise duty on goods manufactured or cleared on or before 1st July 2017. The form is issued to a person not registered under the central excise act but is registered to trade under the GST Act.

Contents of the credit transfer document

1. Central excise registration no.

2. Invoice no.

3. Date of removal

4. Serial no.

5. Address of concerned Central Excise Division no.

6. Name, address & GSTIN of the person to whom it is issued

7. Description and classification of goods

8. Mode of transport and vehicle registration no.

9. Rate of duty

10. Quantity and value

What are the conditions to issue a credit transfer document?

  These conditions should be fulfilled to issue a credit transfer document. Some of the conditions are:-

1. The value of items of goods per unit or item is more than Rs.25, 000 and the goods are distinctly identified.

2. The manufacturer should maintain documents that contain details regarding the clearance of goods and the duty paid by them.

3. The above records should be made available for verification on demand by the central excise officer.

4. The manufacturer who is required to issue the credit transfer document must make sure the dealer contains possession of the goods in the same form in which it was cleared by the manufacturer

5. To avail credit through a credit transfer document, the dealer must maintain all invoices of buying and selling from the manufacturer of goods

6. CTD must not be issued for a dealer to whom an invoice for the same goods was issued before 1st July 2017, as the dealer will claim Input tax Credit based on the invoice, and will end up claiming ITC twice for the same goods

7. If a dealer is claiming credit based on a credit transfer document on manufactured goods, he is not liable to claim the credit on transition rules under the CGST Act. 2017, in case of identical goods manufactured by the same manufacturer available in the stock of the same dealer.

8. At the time of supply of goods by the dealer, he should mention the credit transfer document number in the invoice issued by him, to claim a credit based on the credit transfer document.

What is the process for issuing a credit transfer document?

The manufacturer should issue credit transfer documents within 30 days from 1st July 2017, i.e. before 30th July 2017. It is also important to issue the relevant invoices with credit transfer documents.

What are the documents required to be filed?

Document

Due date for filing

Who should issue the document?

Table 1 of Trans 3

60 days from 1st July 2017

Manufacturer issuing the CTD

Table 2 of Trans 3

60 days from 1st July 2017

Dealer availing credit on the basis of CTD

TRANS 3A

No due date

Manufacturer issuing the CTD. Records have to be made available to the central excise officer on demand

TRANS 3B

No due date

Dealer availing the credit based on CTD. Records have to be made available to the central excise officer on demand.

What are the consequences of availing credit twice for the same goods?

  For availing of the required credit, the dealer needs CTD (Credit transfer document) from the manufacturer. In case the dealer avails credit more than once, then the responsibility of the same will fall jointly and severally on the dealer and manufacturer, Both shall be liable for any excess credit claimed and availed under the provision of the CENVAT credit rules, 2008, in respect of,

1. Recovery

2. Interest and

3. Penalty

All will be equally liable to pay by both manufacturers as well as dealers.

FAQS

1.Who is required to file Form GST TRAN 3? 

Table 1 of TRAN 3 is required to be filed by the manufacturer issuing CTD and Table 2 of TRAN 3 is required to file the dealer who is claiming credit based on CTD.

2. Can we modify the details submitted in TRAN 3?

Details once submitted in TRAN 3 cannot be modified.

3. When is the due date for issuing the CTD?

The due date for issuing the CTD is 30 days from 1st July 2017

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