GST Tribunal Says JSW Entitled To Full Transitional Credit On Capital Goods Despite Taking None Before GST, While 81 Invoices Await Verification

The Appellant received capital goods before 1 July 2017 but did not claim the related CENVAT credit in its pre-GST returns because inspection of the goods was pending. It later claimed ₹2,13,593 as transitional credit through TRAN-1 under Section 140(2) of the CGST Act.

The Department disallowed the credit, reasoning that the Appellant had not previously availed any portion of it and that ₹1,54,400 of the claim appeared to relate to a single invoice, although that invoice included an annexure listing 81 invoices. The first appellate authority rejected the Appellant’s appeal. The Appellant then appealed to the Tribunal.

Section 140(2) of the CGST Act permits transition of unavailed CENVAT credit on capital goods, subject to the statutory conditions, including that the credit was not carried forward in a return under the existing law and was admissible under both the existing law and the GST law. Its Explanation defines “unavailed CENVAT credit” as the eligible credit remaining after deducting credit already availed.

Rule 117(2)(a) of the CGST Rules requires the taxpayer to provide particulars of credit already availed or utilised and credit yet to be availed or utilised; it does not require the amount already availed to be greater than nil.

The Tribunal also considered the CBIC’s Circular No. 182/14/2022-GST dated 10 November 2022 and its verification guidance for Table 6(a) of TRAN-1, alongside its prior ruling in *Deltron v. Commissioner, CGST, Ludhiana*, Appeal No. APL/28/CHD/2026, dated 16 October 2026.

Applying its reasoning in *Deltron*, the Tribunal held that Section 140(2) does not bar transition merely because the taxpayer had availed no portion of the capital-goods credit before GST; the provision allows credit not carried forward in the pre-GST return, whether the unavailed amount represents 50% or the full eligible credit. It therefore set aside the disallowance of the capital-goods credit.

As to the ₹1,54,400 claim, the Tribunal noted the Appellant’s explanation that the TRAN-1 entry omitted 80 invoice details by clerical oversight and that copies of all 81 invoices had been produced with the appeal. It considered it appropriate for the original authority to verify those invoices and allow the credit if otherwise in order.

It directed the Appellant to submit the 81 invoices supporting the ₹1,54,400 claim to the original authority, which must verify them and allow the credit if otherwise admissible, completing the exercise within one month. The appeal was disposed of accordingly.