GST Transition Filing

The GST transition was supposed to be a one-time event in 2017. The CGST Act, through Sections 139 to 142 and Rule 117, allowed taxpayers to carry forward the closing balance of CENVAT credit, VAT input tax credit, and other legacy regime credits into the new GST credit ledger by filing TRAN-1 (and TRAN-2 for stock-on-hand without duty-paid documents). The original deadline was 27 December 2017, extended several times by CBIC, and finally closed. For five years the door appeared shut. Then in Filco Trade Centre Pvt Ltd v Union of India (2022), the Supreme Court ordered the GSTN to reopen the TRAN-1 / TRAN-2 portal for two months — 1 October 2022 to 30 November 2022, later extended to 30 January 2023 — for any taxpayer who had failed to file or could not file these forms.

That single order created a second-chance regime that is still being worked through in 2026. CBIC issued Circular No. 180/12/2022-GST and the related SOP setting out how field formations should verify, allow or reject the reopened claims; how the credit, once allowed, would be re-credited to the electronic credit ledger; how recovery of wrongly availed transitional credit would be initiated under Sections 73 / 74; and how appeals and writs would proceed. Tens of thousands of taxpayers filed in the reopened window. By 2026, the verification orders, recovery notices, appeals to the Commissioner (Appeals), and GSTAT proceedings on transitional credit are still active across States. Old assessments are being reopened on the basis of newly surfaced TRAN-1 / TRAN-2 filings; legitimate credits are being denied on technicalities; and recovery proceedings under Section 73 are running on amounts running into crores per assessee.

We work the entire transitional credit lifecycle — from substantiating the original 2017 claim with legacy CENVAT / VAT records, through verification responses, to first appeal, GSTAT and writ defence — for taxpayers who filed in the reopened window or are facing recovery on transitional credit already utilised.

The Transitional Credit Buckets That Are Still Live

TRAN-1 — Carry-Forward CENVAT / VAT Closing Balance:
Closing balance of CENVAT credit (Service Tax / Central Excise) and VAT input tax credit as on 30 June 2017, eligible for carry-forward into GST under Section 140(1) read with Rule 117.

• TRAN-1 — Stock-on-Hand With Duty-Paid Documents:: Credit on inputs held in stock, semi-finished and finished goods as on the appointed date, where duty-paid invoices are available, under Section 140(3).

TRAN-2 — Stock-on-Hand Without Duty-Paid Documents:
Deemed credit at 60% / 40% of CGST paid (depending on tax rate) on the supply of stock held by a registered person not in possession of duty-paid documents — first proviso to Section 140(3).

• Capital Goods in Transit:: CENVAT credit on capital goods received after 1 July 2017 against pre-GST invoices, under Section 140(5).

• Centralised Service Tax Registration:: Distribution of credit from a centralised registration to State GSTINs under Section 140(8) — disputes on apportionment ratio still active.

The Filco Trade Centre Reopening — What It Did And Did Not Do

The Supreme Court in Filco directed the GSTN to open the TRAN-1 / TRAN-2 portal for any taxpayer, regardless of whether they had filed earlier or whether the matter was pending in court. Aggrieved taxpayers had two months (later extended) to file or revise. The order did not expand the substantive eligibility under Sections 140 / Rule 117 — only the procedural opportunity to file. The CBIC SOP issued through Circular 180/12/2022-GST sets out the verification — invoice-wise substantiation of the closing balance, stock register, duty-paid documents, and tax-period-wise ledger workings. Where verification is satisfactory, the credit is re-credited to the electronic credit ledger via Form GST PMT-03A. Where unsatisfactory, the credit is rejected and recovery initiated under Section 73 / 74 against any amount already utilised.

Where Transitional Credit Cases Are Going Wrong In 2026

Verification rejections on flimsy grounds (incomplete records from 2016-17, missing duty-paid invoices on legacy stock, mismatched closing balance with the last Service Tax / VAT return). Recovery under Section 74 with 100% penalty on credit already utilised in 2017-18 / 2018-19. Limitation arguments on Section 73 / 74 — six and five years respectively from the relevant FY — being contested both ways. GSTAT and High Court rulings still being delivered on whether substantive eligibility can be denied where procedural reopening was court-ordered. We work each of these from a substantiated record.