GST Credit Transfer Document

The concept of Credit Transfer Document (CTD) has been recently introduced in GST to transfer CENVAT credit paid on specified goods available with a trader on GST implementation date. In this article, we look at GST Credit Transfer Document in detail.

Who can issue GST Credit Transfer Document?

A manufacturer who was registered under Central Excise can issue Credit Transfer Document to evidence payment of central excise duty for goods manufactured and cleared by him before the date of GST implementation. CTD should be issued under the cover of an invoice issued to a person who was not registered under Central Excise, but is registered under GST.

Criteria for Issuing Credit Transfer Document

The following limitations, conditions and procedures must be followed while issuing GST Credit Transfer Document:

1. The value of such goods in higher than rupees twenty five thousand per piece, bears the brand name of the manufacturer or the principal manufacturer and are identifiable as a distinct number such as chassis / engine no. of a car.
2. Verifiable records of clearance and duty payment relatable to each piece of such goods is maintained by the manufacturer and are made available for verification on demand by a Central Excise officer.
3. The Credit Transfer Document should be serially numbered and should contain the Central Excise registration number, address of the concerned Central Excise Division, name, address and GSTIN number of the person to whom it is issued, description, classification, invoice number with date of removal, mode of transport and vehicle registration number, rate of duty, quantity, value and duty of central excise and amount paid.
4. The manufacturer is 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.
5. Credit Transfer Document shall be issued within 30 days of the GST implementation date and copy of the corresponding invoices should be enclosed with the CTD.
6. Copies of all invoices relating to buying and selling from manufacturer to the dealer, through intermediate dealers, is maintained by the dealer availing credit using CTD.
7. Credit Transfer Document should not be issued in favour of a dealer to whom invoice was issued for the same goods before the appointed date.
8. A dealer availing credit using Credit Transfer Document on manufactured goods would not be eligible to avail credit under GST Transition Rules made under CGST Act, 2017 on identical goods manufactured by the same manufacturer available in the stock of the dealer.
9. The dealer availing credit on the basis of CTD should , at the time of making supply of such goods, mention the corresponding CTD number in the invoice issued by him.

Misuse of Credit Transfer Document

If a manufacturer issues a Credit Transfer Document and the credit of central tax is availed twice on the same goods, then the manufacturer would 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 would apply on the manufacturer.

Procedure for Issuing Credit Transfer Document

A manufacturer issuing a Credit Transfer Document should submit details in TRANS 3 on GST common portal within sixty days of the appointed date.

A dealer availing credit on Credit Transfer Document should submit details in TRANS 3 on common portal within sixty days of the appointed date.

All manufacturers issuing CTD are required to maintain record in the form TRANS 3A and the records should be made available to the Central Excise officer for verification on demand.

Dealers availing credit on Credit Transfer Document should maintain record in the form TRANS 3B and the record should be made available to the Central Excise officer for verification on demand.

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