What is Credit Transfer Document (CTD)?

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.

A Credit Transfer Document (CTD) is a form issued by a manufacturer of goods, as an evidence of payment of Excise Duty on goods manufactured and cleared before 1st July.

Who can issue Credit Transfer Document (CTD)?

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. The goods must be cleared to a person not registered under Central Excise Act but is a registered trader under GST.

Conditions for issuing Credit Transfer Document (CTD)

  1. The goods are distinctively identifiable (eg – brand, chassis number or engine number of the car) and the value of the goods manufactured is more than Rs. 25,000 per item or per unit.
  2. The manufacturer maintains documents which have itemized details of clearance of goods, and the duty paid on them. These records should be made available for verification on demand by a Central Excise Officer.
  3. The manufacturer should make sure that the trader to whom Credit Transfer Document is issued is in possession of the goods in the same form in which it was cleared by the manufacturer.
  4. The dealer availing credits through CTDs should maintain invoices of buying and selling from the manufacturer.
  5. CTD should not be issued in favour of a dealer to whom an invoice was issued for the same goods before 1st July 2017, as the dealer will carry forward ITC on basis of invoice, and will end up claiming input tax credit twice if CTD is issued.
  6. A dealer availing credit using Credit Transfer Document on manufactured goods shall not be eligible to avail credit under Transition Rules of the CGST Act, 2017, on identical goods manufactured by the same manufacturer available in the stock of the said dealer, for the same reason as above.
  7. At the time of the supply of goods, the dealer availing credit on the basis of Credit Transfer Document should mention the corresponding Credit Transfer Document number in the invoice issued by him.
  8. The CTD should be serially numbered and also contain the:
  • Central Excise registration number
  • Address of the 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 excise duty paid.

Procedure for issuing Credit Transfer Document (CTD)

  • The manufacturer should issue a CTD within 30 days from 1st July, 2017, i.e before 30th July, 2017. Also, the manufacturer has to attach the relevant invoices with the 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.

Misuse of Credit Transfer Document (CTD)

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.

Documents needed to be filed

Document

Due date for filing

Who should issue the document

Table 1 of TRANS 3

60 days from 1st July 2017

Manufacturer issuing the CTD

Table 2 of TRANS 3

60 days from 1st July 2017

Dealer availing the credit based on the CTD

TRANS 3A

No due date

Manufacturer issuing the CTD. Records have to be made available to the appropriate Central Excise Officer on demand

TRANS 3B

No due date

Dealer availing the credit based on the CTD. Records have to be made available to the appropriate Central Excise Officer on demand

 

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