Transition to GST (Transitional Provisions): formula sheet

Key formulas

Section 139(1): provisional registration

Registered under existing law + valid PAN → provisional certificate of registration from the appointed day

Subject to prescribed conditions. If the conditions are not complied with, it is liable to be cancelled unless replaced by a final certificate.

Section 139(2): final registration

Final certificate granted in the prescribed form and manner, subject to prescribed conditions

It replaces the provisional certificate.

Section 139(3): deemed not issued

Registration cancelled on the person's application that he was not liable under section 22 or 24 → certificate deemed not issued

Applies to a provisional certificate issued under sub-section (1).

Section 141: job work time limit

Return within 6 months from the appointed day; extension by Commissioner for a further period not exceeding 2 months, on sufficient cause

Section 141(1) covers inputs sent for job work, 141(2) covers semi-finished goods sent for manufacturing processes, and 141(3) covers excisable goods removed without payment of duty for tests or processes not amounting to manufacture. Each has the same six-month limit and two-month extension.

Section 141(4): declaration condition

No tax only if manufacturer and job worker declare details of goods held by the job worker on the appointed day

Form, manner and time are as prescribed.

Consequence of late return

Goods not returned in time → input tax credit liable to be recovered in accordance with clause (a) of sub-section (8) of section 142

Section 141 says this in the second proviso to each of sub-sections (1), (2) and (3), so it applies to all three job work cases. For your answer, the reference to section 142(8)(a) is enough.

Rule 118: TRAN-1 for section 142(11)(c)

Every person to whom section 142(11)(c) applies → submit FORM GST TRAN-1 electronically within the period specified in rule 117 or such further period as extended by the Commissioner

The declaration furnishes the proportion of supply on which VAT or service tax was paid before the appointed day but the supply is made after, and the ITC admissible thereon. The words "a period of ninety days of the appointed day" were substituted by Notification No. 36/2017-CT dated 29.09.2017.

Basic time limit

Return within 6 months from the appointed day

Applies to inputs (s.141(1)), semi-finished goods (s.141(2)) and excisable goods sent for tests or non-manufacturing processes (s.141(3)).

Maximum extension

Extension by Commissioner ≤ 2 months, on sufficient cause

Outer limit is therefore 6 + 2 = 8 months from the appointed day.

Consequence of delay

Not returned in time → ITC liable to be recovered under s.142(8)(a)

The section speaks of recovery of input tax credit, not of tax on the return itself.

Declaration condition

No tax only if manufacturer and job worker both declare stock held with the job worker on the appointed day

Section 141(4). Form, manner and time are as prescribed; rule 119 prescribes FORM GST TRAN-1.

Transfer during the period

Transfer under existing law to a registered person for supply: with tax in India, or without tax for export, within the 6-month (or extended) period

Available for semi-finished goods (s.141(2)) and for excisable goods sent for tests or other process (s.141(3)).

Basic return period

Return within 6 months from the appointed day

Applies to inputs (s.141(1)), semi-finished goods (s.141(2)) and excisable goods sent for tests or non-manufacture processes (s.141(3)). No tax if returned in time.

Extension

6 months + extension of up to 2 months (maximum 8 months)

Granted by the Commissioner only on sufficient cause shown. It is not automatic.

Declaration condition

No tax only if manufacturer and job worker declare stock held by job worker on the appointed day

Section 141(4). The form is FORM GST TRAN-1 under rule 119, filed electronically within the rule 117 period or the period extended by the Commissioner.

Consequence of non-return

Goods not returned in time → ITC liable to be recovered under section 142(8)(a)

Stated in the second proviso to each of sub-sections (1), (2) and (3).

Transfer option

Goods may be moved to a registered person's premises for supply on payment of tax, or without payment for export, within the same period

Third proviso to s.141(2) and s.141(3), done as per existing law.

Time limit for return

Six months from the appointed day, extendable by the Commissioner by up to two months (total maximum eight months)

Extension needs sufficient cause. Section 141(1), (2) and (3) each carry this proviso.

Inputs, sub-section (1)

Inputs sent under existing law + returned on or after appointed day within time = no tax

Covers processing, testing, repair, reconditioning or any other purpose, including partially processed inputs.

Semi-finished goods, sub-section (2)

Semi-finished goods sent for manufacturing processes + returned in time = no tax

Manufacturer may transfer them to a registered person's premises for supply on payment of tax or without tax for exports, within the period.

Tested goods, sub-section (3)

Excisable goods removed without duty for tests or processes not amounting to manufacture + returned in time = no tax

Other premises may be registered or not. Goods may be transferred from there on payment of tax or without tax for export within the period.

Declaration condition

Relief only if manufacturer and job worker both declare stock held by job worker on appointed day

Section 141(4). Form, manner and time are as prescribed.

Consequence of delay

Not returned in time = ITC liable to be recovered under section 142(8)(a)

This is stated in the second proviso to each of sub-sections (1), (2) and (3).

Quick revision

• Section 141 covers job work goods sent out under existing law before the appointed day.
• Three cases: inputs, semi-finished goods, and excisable goods sent without duty for tests or non-manufacture processes.
• No tax if goods return to the said place within six months from the appointed day.
• The Commissioner may extend by a further period not exceeding two months, on sufficient cause.
• If goods are not returned in time, input tax credit is liable to be recovered under Section 142(8)(a).
• Semi-finished goods and tested excisable goods may be transferred on payment of tax, or without payment for export, within the period.
• Section 141(4): tax is not payable only if both manufacturer and job worker declare stock held by the job worker.
• Rule 119: declaration in FORM GST TRAN-1 within the period in rule 117 or as extended by the Commissioner.
• Permanent rule, Section 143: inputs return within one year, capital goods within three years; extendable by one and two years respectively.
• Moulds and dies, jigs and fixtures, and tools are outside the three-year limit.
• Under Rule 45, goods go under a challan; details go in FORM GST ITC-04.
• Responsibility for accounts lies with the principal.

Common mistakes

• Counting the six months from the date the goods were sent out to the job worker. Fix: Under section 141 the six months run from the appointed day, not from the date the goods were sent out.
• Thinking the Commissioner can extend the period by any length. Fix: Extension needs sufficient cause and cannot exceed a further two months.
• Counting six months from the date the goods were sent out. Fix: Under section 141 the six months run from the appointed day.
• Saying the extension can be any period, or that it is granted without cause. Fix: Extension is by the Commissioner, on sufficient cause shown, for not more than two further months.
• Counting six months from the date goods were sent to the job worker. Fix: In section 141 the period runs from the appointed day.
• Saying the extension can be up to six months or granted by the proper officer. Fix: The Commissioner may extend by a period not exceeding two months, on sufficient cause.
• Saying the period is eight months as a flat rule. Fix: The base period is six months. The extra period of up to two months needs the Commissioner's approval on sufficient cause.
• Giving the extension power to the Board or the proper officer. Fix: Section 141 says the extension is by the Commissioner.

Exam tips

• Memorise the section map: 139 migration, 141 job work, and 142(8)(a) as the place section 141 sends you for recovery of credit.
• In MCQs, watch for traps on six months versus two months and on who may extend.
• For case questions, write the condition, test it against the facts, then give the consequence.
• Quote the section number only when sure; otherwise describe the rule in words.
• In MCQs, the usual traps are 'one year' or 'three years' (section 143) in place of six months, and extension of 'one month' or 'three months' in place of two.
• Always write the sub-section: (1) inputs, (2) semi-finished goods, (3) excisable goods sent for tests or non-manufacturing process, (4) declaration.
• In case questions, spot the declaration. A missing TRAN-1 or one-sided declaration changes the answer.
• Use the exact consequence wording: ITC liable to be recovered under section 142(8)(a).