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May 28, 2020

Step wise Process for transferring Input Tax Credit from one GSTN to another Form ITC- 02A

Step wise Process for transferring  ITC from 1 GSTN No to another GSTN No of individual having same PAN with the insertion of New Form ITC- 02A

Introduction

The GSTN Portal is in a process of updating and providing more provisions to the individuals than ever before. Earlier if an individual holding the same PAN card had separate registration or multiple places of business in a State/UT was not able to transfer his/ her unutilized matched Input Tax Credit lying in his/her Electronic Credit Ledger. But now with the  provision of Form ITC 02A the individual if intends to transfer the ITC can do the same registered entities/place of businesses. In case you have obtained the separate registration for multiple places of business in a State/UT, you can transfer ITC in ‘Form GST ITC-02A’ within 30 days after obtaining such registration.

There are certain situations where an individual has separate GST registrations for different or same businesses. If an individual has separate registration, then he will have separate Input Tax Credit (ITC) for each registration. Issues arise when he wants to set off ITC from one business against tax liability of another business. Is such set off possible?

Illustration

For instance, Mr A has a textile business as well as a Restaurant in Mumbai. He has ITC of Rs 50,000 pertaining to the textile business but has no tax liability so the ITC set off therefore remains unused. On the other hand, he has a tax liability of Rs 70,000 with respect to his restaurant. He wishes to transfer his ITC from his textile business to his restaurant. Can Mr A do so?

Initially, there was no provision for transfer of ITC where individuals have separate registration numbers. However, the government has now notified Form ITC-02A for transfer of ITC from one registration number to another. Form ITC-02A is basically a Declaration for transfer of ITC in case the same person of obtains separate registration within a State or Union Territory.

It is important to note that, an individual can transfer ITC from one registration number to another, provided both the Registration numbers have the same PAN. Transfer is not possible when different registration numbers have different PAN’s.

Relevant Rule

Rule 41A – Transfer of credit on obtaining separate registration for multiple places of business within a State or Union territory.

1) A registered person who has obtained separate registration for multiple places of business in accordance with the provisions of rule 11 and who intends to transfer, either wholly or partly, the unutilised input tax credit lying in his electronic credit ledger to any or all of the newly registered place of business, shall furnish within a period of thirty days from obtaining such separate registrations, the details in FORM GST ITC-02A electronically on the common portal, either directly or through a Facilitation Centre notified in this behalf by the Commissioner:

Provided that the input tax credit shall be transferred to the newly registered entities in the ratio of the value of assets held by them at the time of registration.

Explanation.- For the purposes of this sub-rule, it is hereby clarified that the value of assets‘ means the value of the entire assets of the business whether or not input tax credit has been availed thereon.

2) The newly registered person (transferee) shall, on the common portal, accept the details so furnished by the registered person (transferor) and, upon such acceptance, the unutilised input tax credit specified in FORM GST ITC-02A shall be credited to his electronic credit ledger.

Step wise Process for transferring  ITC from 1 GSTN No to another of same individual holding more than 1 GST registration No with same PAN with the insertion of New Form ITC- 02A

An individual can transfer ITC where he has separate registration within a State or Union Territory using the below mentioned process.

Process for Filling Form ITC-02A

Step 1 – Login to https://www.gst.gov.in/ and  Login using transferor login credentials

Step 2 – Select the Service tab- Returns and then select “ITC Form” in the Return Option of the Services Tab

Step 3 – Under the tab GST ITC-02A Select  Transfer of ITC

Step 4 – After selecting the Transfer ITC Option a page will be opened asking for basic details

Step 5 – Fill in the Transferee GSTIN number. Once the GSTIN number is entered, Transferee’s Trade Name and Transferee’s Legal Name will be automatically auto populated. Fill in the required ITC amounts to be transferred and click on save button, After which a confirmation message will be displayed that the details  has been saved successfully.

Step 6 – Select the check box for declaration and select authorised signatory- Select “File ITC with EVC” or “File ITC with DSC” (whichever option is preferable)

Once the Transfer of ITC process is completed the Transferee has to Approve the same following the process as under

Process for Approval of Form ITC-02A

Step 1 – Login to https://www.gst.gov.in/ and  Login using transferee login credentials

Step 2 – Select the “ITC Form” in the Return Option of the Services Tab

Step 3 – Select the ITC-02A form and then click on the ‘Take Action’ Tab

Step 4 – Verify the details provided and select accept- Once you select accept a confirmation message of acceptance will reflect. Thereafter Select the check box for declaration and select authorised signatory- Select “File ITC with EVC” or “File ITC with DSC” (whichever option is preferable)

Step 5 – Verify in the Credit Ledger whether the ITC has been credited to the transferee and the same has been debited from the transferor.

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