GST TRAN-1 Issues: 4 Years and Counting…!!

GST TRAN-1 Issues - GST - Taxscan

It has been almost 4 years since the implementation of the GST but still the issues or glitches in respect of GST TRAN-1 are not resolved. The Form TRAN-1 should be filed by every person having ITC on closing stock and migrated to GST form VAT, Service Tax, or Central Excise.

Time and again the issue which was raised is despite the admitted successful filing of Form TRAN-1, the request of the taxpayer for transitioning of credit has not been approved by the ITGRC merely on the basis that there were no technical glitches on the GSTN.

There has been a plethora of judicial precedents directing the GSTN to clear the technical glitches in respect of  Form TRAN-1.

The Chhattisgarh High Court in the case of M/s Dhamtari Krishi Kendra vs. Union of India directed the Commissioner to refer the matter to the GST Council so as to allow TRAN-1 & TRAN-2 return filing if failure of Appellant was due to technical glitches on the common portal.

The Madurai Bench of Madras High Court in the case of M/s Anand Distributors vs. Union of India directed the GST Authorities to facilitate the uploading of Form TRAN-1. The case of the petitioner was that when CGST Act came into force on 01.07.2017, he was entitled to a credit of Rs.5,03,202/-. The petitioner would state that though he made several attempts to file form GST TRAN-1, he could not do so due to technical glitches.

The Bombay High Court in the case of Heritage Lifestyles and Developers and Private Ltd. vs. Union of India directed the Goods and Service Tax (GST) Authority to accept the TRAN-1 and grant due Input Tax Credit (ITC) in the electronic credit ledger. The division bench of Justice Ujjal Bhuyan and Justice Abhay Ahuja clarified that the finding of the ITGRC in the face of the admission by the Respondents to the amount of credit would be a mere technicality which cannot come in the way of substantial justice.

Therefore, there is no term ‘technical glitch’ defined in the GST Act or Rules made thereunder. However, the GST Network and the department under the umbrella of technical glitch are making the taxpayers suffer as they are unable to file TRAN-1 on time.

The GST Council is not heeding to the orders of the various High Court directions to re-open the portal for filing TRAN-1 or to accept the manual TRAN-1. The department is very much sitting on the proof of ‘technical glitch’ to allow the taxpayers to file or revise the TRAN-1.

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