GST update on Proposed Credit Transfer Document

The concept of Credit Transfer Document (CTD) has been recently introduced in the GST regime. It is proposed to insert provisions in CENVAT Credit Rules, 2004 for transfer of CENVAT credit paid on specified goods available with a trader on the GST implementation date.
Who can issue Credit transfer document?
A manufacturer who was registered under Central Excise Act, 1944 can issue Credit Transfer Document to evidence payment of duty of central excise for goods manufactured and cleared by him before the date of GST implementation. CTD should be issued under the cover of invoice issued to a person who was registered under the Central Excise but is registered under the GST.
Conditions to issue such CTD:-
• Manufacturer issuing such CTD has to be registered under Central Excise Act, 1944.
• The value of such goods must be higher than rupees twenty five thousand per piece.
• Such goods must bear the brand name of the manufacturer or the principal manufacturer.
• Such goods must be identifiable as a distinct number such as chassis / engine no. of a car.
• Verifiable records of clearance and duty payment relatable to each piece of such goods must be maintained by the manufacturer and should made available for verification on demand by a Central Excise officer.
Procedure and Liability of Manufacturer issuing CTD:-
• The manufacturer issuing CTD must be satisfied that the dealer to whom CTD is issued is in possession of such manufactured goods in the form in which it was cleared by him. Such CTD shall be issued within 30 days of the appointed date.
• CTD shall not be issued in favour of a dealer to whom invoice was issued for the same goods before the appointed date.
• In case on the basis of CTD issued by a manufacturer, the credit of central tax is availed twice on the same goods under GST, such manufacturer shall be jointly and severally responsible for excess credit availed by the dealer and provisions for recovery of credit, interest and penalty under the CENVAT Credit Rules, 2004 shall apply mutatis-mutandis on such manufacturer.
• A manufacturer issuing a CTD shall submit details thereof in table 1 of TRANS 3 within sixty days of the appointed date.
• A manufacturer issuing a CTD shall maintain record in the form TRANS 3A and such record shall be made available to the Central Excise officer for verification on demand.
These provisions are only drafted, they are yet to be finalised.
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GST update on Proposed Credit Transfer Document

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