Transition of ISD Credit to ECL under GST can be Availed during Re-Opening of Transitional .

A division bench of the Bombay High Court, while considering a bunch of petitions relating to the transition of ISL Credit to Electronic Cash Ledger (ECL) under the GST regime, held that the same can be availed during the re-opening of transitional credit window from 1st September to 31st October as per the Supreme Court decision last month.

A division bench of the Bombay High Court, while considering a bunch of petitions relating to the transition of ISL Credit to Electronic Cash Ledger (ECL) under the GST regime, held that the same can be availed during the re-opening of transitional credit window from 1st September to 31st October as per the Supreme Court decision last month.

The common objection of Respondent in this batch of Petitions is that ISD Credit cannot be transitioned directly into the Electronic Credit Ledger (ECL) maintained under the GST Regime. In view of the provisions of CGST Act, the ISD credit ought to have been distributed by the said ISD to its different units/offices before 1.07.2017 and thereafter the transferee unit/offices ought to have filed TRAN-1 to transition the said credit distributed to it by ISD, into their respective ECL.

Considering the recent judicial decisions including the Supreme Court ruling in Filco Trade, the Court issued the following directions;

(a) All Petitioners, through their respective units/offices registered under CGST Act and/or State Acts, as the case may be, can avail this window and file GST TRAN-1/revised GST TRAN-1 at the units/offices between 01.09.2022 to 31.10.2022 in terms of the Hon’ble Supreme Court’s order in Filco Trade (Supra)

(b) The GST TRAN-1/ revised GST TRAN-1 filed by the units/offices will be basis the manual ISD invoices issued / to be issued by ISD of Petitioner subject to aggregate credit not exceeding the ISD credit available with the ISD Petitioner

(c) The Central Board of Indirect Taxes and Customs (CBIC), keeping in mind the problems faced by various parties, to issue a clarification, after due deliberation, in relation to the distribution / reporting of ISD credit preferably within 21 days from the date this is Order is uploaded, keeping in mind the approach adopted by the Hon’ble Supreme Court of India in Filco Trade (Supra). Petitioners, may, if so advised, approach the CBIC in this regard.

(d) The concerned officers are given 90 days thereafter to verify the veracity of the claim/ Transitional Credit and pass appropriate orders thereon on merits after granting appropriate reasonable opportunity to the parties concerned.

MCA Amends Form No. STK-1, Notice by Registrar for Removal of names of a company from ROC

The Ministry of Company Affairs (MCA) has amended the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.

As per the amendment notified on Friday, the Government stated that “In the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, – (a) in Form No. STK-1, in paragraph (1), for the brackets and words “(tick whichever is applicable)” , the following shall be substituted, namely:- “ the company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12. (tick whichever is applicable)”; (b) in Form STK-5, in paragraph 1, after sub-paragraph (iii) and before the long line, the following shall be inserted, namely:- “(iv) the following companies are not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.”

Further, in Form No. STK-5A, in paragraph 1, for the brackets and words “[Strike off whichever is not applicable]”, the following shall be substituted, namely:- “(iv) are not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12.”

GST on Pre-packaged Commodities: Dept of Consumer Affairs mandates Display of Increased MRP

In view of the recent decision to impose 5% GST on pre-packaged commodities, the Department of Consumer Affairs vides its letter dated 01.08.2022 clarified the Impact of GST on unsold stock of Pre-Packaged Commodities under Legal Metrology (Packaged Commodities) Rules 2022.

As per the letter issued on Monday, the manufacturers or packers, or importers are permitted to declare revised MRP on unsold stock up to 31.01.2023.

The department, in a letter addressing the Controller of Legal Metrology, clarified that “the central government hereby permits the manufacturers or packers or importers of pre-packaged commodities to declare the revised retail sale price (MRP) on the unsold stock manufactured /packed I imported prior to revision of GST, after inclusion of the applicable/ increased amount of tax or after reducing the reduced amount of tax due to GST, if any, in addition to the existing retail sale price (MRP) up to 31st January 2023 or till such date the stock is exhausted, whichever is earlier.”

It further clarified that the difference between MRP and revised MRP should be in excess of to increase in Tax.

“The difference between the retail sale price originally printed on the package and the revised price shall not, in any case, be higher than the extent of increase in the tax, if any, or in the case of imposition of the fresh tax, such fresh tax, on account of implementation of GST Act and Rules. In the case of reduction of tax, the revised price shall not, in any case, be higher than the extent of price after the deduction of tax, if any,” the letter said.

It further stated that the manufacturers or packers or importers shall make at least two advertisements in one or more newspapers in this regard and also by the circulation of notices to the dealers and to the Director of Legal Metrology in the central Government and Controllers of Legal Metrology in the states and Union Territories, indicating the change in the price of such packages.

The letter clarified that any packaging material or wrapper which could not be exhausted by the manufacturer or packer or importer prior to revision of GST, may be used for the packing of material up to 31st January, 2023 or till such date the packing material or wrapper is exhausted, whichever is earlier after making corrections required in retail sale price (MRP) on account of implementation of GST by way of stamping or putting sticker or online printing as the case may be.