Section 142 - Miscellaneous transitional provisions
Chapter XX - Transitional Provisions
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Finin2min Summary - Section in 2 Minutes
Coordinates pre-GST returns, refunds, price
revisions, contracts, assessments, appeals and
recoveries with the GST regime, generally
preserving cash settlement under the existing law
and preventing double credit.
Exact operative text
142. Miscellaneous transitional provisions.-(1) Where any goods on which duty, if any, had been
paid under the existing law at the time of removal thereof, not being earlier than six months prior to the
appointed day, are returned to any place of business on or after the appointed day, the registered person shall
be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other
than a registered person, to the said place of business within a period of six months from the appointed day
and such goods are identifiable to the satisfaction of the proper officer:
Provided that if the said goods are returned by a registered person, the return of such goods shall be
deemed to be a supply.
(2)(a) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods
or services or both is revised upwards on or after the appointed day, the registered person who had
removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or
debit note, containing such particulars as may be prescribed, within thirty days of such price revision and
for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued
in respect of an outward supply made under this Act;
(b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or
services or both is revised downwards on or after the appointed day, the registered person who had removed
or provided such goods or services or both may issue to the recipient a credit note, containing such
particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act
such credit note shall be deemed to have been issued in respect of an outward supply made under this Act:
Provided that the registered person shall be allowed to reduce his tax liability on account of issue of
the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to
such reduction of tax liability.
(3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any
amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be
disposed of in accordance with the provisions of existing law and any amount eventually accruing to him
shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law
other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944):
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount
so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance
of the said amount as on the appointed day has been carried forward under this Act.
(4) Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing
law in respect of the goods or services exported before or after the appointed day, shall be disposed of in
accordance with the provisions of the existing law:
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount
so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance
of the said amount as on the appointed day has been carried forward under this Act.
(5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in
respect of services not provided shall be disposed of in accordance with the provisions of existing law and
any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary
contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B
of the Central Excise Act, 1944 (1 of 1944).
(6)(a) every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated
whether before, on or after the appointed day under the existing law shall be disposed of in accordance with
the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be
refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing
law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944)
and the amount rejected, if any, shall not be admissible as input tax credit under this Act:
Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the
said amount as on the appointed day has been carried forward under this Act;
(b) every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated
whether before, on or after the appointed day under the existing law shall be disposed of in accordance with
the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal,
review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax
under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.
(7)(a) every proceeding of appeal, review or reference relating to any output duty or tax liability
initiated whether before, on or after the appointed day under the existing law, shall be disposed of in
accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of
such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered
as an arrear of duty or tax under this Act and the amount so recovered shall not be admissible as input
tax credit under this Act.
(b) every proceeding of appeal, review or reference relating to any output duty or tax liability initiated
whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with
the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to
him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other
than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and the
amount rejected, if any, shall not be admissible as input tax credit under this Act.
(8)(a) where in pursuance of an assessment or adjudication proceedings instituted, whether before,
on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes
recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an
arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under
this Act;
(b) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after
the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the
taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the
contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central
Excise Act, 1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under
this Act.
(9)(a) where any return, furnished under the existing law, is revised after the appointed day and if,
pursuant to such revision, any amount is found to be recoverable or any amount of CENVAT credit is found to
be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under
this Act and the amount so recovered shall not be admissible as input tax credit under this Act;
(b) where any return, furnished under the existing law, is revised after the appointed day but within the
time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is
found to be refundable or CENVAT credit is found to be admissible to any taxable person, the same shall be
refunded to him in cash under the existing law, notwithstanding anything to the contrary contained in the said
law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and
the amount rejected, if any, shall not be admissible as input tax credit under this Act.
(10) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the
appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax
under the provisions of this Act.
(11)(a) notwithstanding anything contained in section 12, no tax shall be payable on goods under this
Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State;
(b) notwithstanding anything contained in section 13, no tax shall be payable on services under this
Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994
(32 of 1994);
(c) where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the
Finance Act, 1994 (32 of 1994), tax shall be leviable under this Act and the taxable person shall be entitled to
take credit of value added tax or service tax paid under the existing law to the extent of supplies made after
the appointed day and such credit shall be calculated in such manner as may be prescribed.
(12) Where any goods sent on approval basis, not earlier than six months before the appointed day,
are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax
shall be payable thereon if such goods are returned within six months from the appointed day:
Provided that the said period of six months may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding two months:
Provided further that the tax shall be payable by the person returning the goods if such goods are
liable to tax under this Act, and are returned after a period specified in this sub-section:
Provided also that tax shall be payable by the person who has sent the goods on approval basis if such
goods are liable to tax under this Act, and are not returned within a period specified in this sub-section.
(13) Where a supplier has made any sale of goods in respect of which tax was required to be deducted
at source under any law of a State or Union territory relating to Value Added Tax and has also issued an
invoice for the same before the appointed day, no deduction of tax at source under section 51 shall be
made by the deductor under the said section where payment to the said supplier is made on or after the
appointed day.
Explanation.-For the purposes of this Chapter, the expressions "capital goods", "Central Value
Added Tax (CENVAT) credit", "first stage dealer", "second stage dealer", or "manufacture" shall have
the same meaning as respectively assigned to them in the Central Excise Act, 1944 (1 of 1944) or the
rules made thereunder.
CHAPTER XXI
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Paragraph-wise decode
Coordinates pre-GST returns, refunds, price revisions, contracts, assessments, appeals and recoveries with the GST regime, generally preserving cash settlement under the existing law and preventing double credit.
Section-Rule-Form-Notification bridge
No direct Rule certified in Phase 1. Check notifications, circulars, forms and corresponding State law.
The mapping is a legal concordance, not a round-robin related-link list. It is limited to instruments certified in this phase.
Practical example
A pre-GST assessment is concluded after GST begins and results in a refund. The refund is paid in cash under the existing law rather than credited to the GST ledger.
Professional alert
The provision prevents double benefit. A cash refund or recovery under the existing law usually does not become GST ITC unless the statute expressly permits it.
Linked Rules and current operative controls Rules are read as a consolidated legal layer. Where a rule is legacy or institutionally transitioned, the current status is stated expressly. Rule 117 RULE TEXT / CONSOLIDATED BASE LAYER 117. Tax or duty credit carried forward under any existing law or on goods held in stock on the appointed day.- Eligible persons were required to submit FORM GST TRAN-1 electronically within the notified period, with prescribed declarations and stock/duty details. The rule contains special declarations for capital goods, goods sent to job workers, centralised registrations and specified stock credits. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 This is a legacy rule. Apply the statutory conditions, original return data, notified windows and binding judicial/portal reopening directions such as the Supreme Court TRAN-1/TRAN-2 facilitation. Rule 118 RULE TEXT / CONSOLIDATED BASE LAYER 118. Declaration to be made under clause (c) of sub-section (11) of section 142.- Persons to whom the provision applied were required to furnish FORM GST TRAN-1 with the proportion of supply made before the appointed day but invoice issued after it. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Legacy transitional declaration; reconcile contract, milestone, invoice and pre-GST tax evidence. Rule 119 RULE TEXT / CONSOLIDATED BASE LAYER 119. Declaration of stock held by a principal and job-worker.- The principal and job worker were to declare appointed- day stock details in FORM GST TRAN-1 within the prescribed period.
CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Relevant to historical section 141 disputes; preserve challans, stock registers, job-work records and return dates. Rule 120 RULE TEXT / CONSOLIDATED BASE LAYER 120. Details of goods sent on approval basis.- A person holding goods sent on approval not earlier than six months before the appointed day was to submit FORM GST TRAN-1 details within the prescribed period. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Apply section 142(12), the approval dispatch date and return/supply timeline. Rule 120A RULE TEXT / CONSOLIDATED BASE LAYER 120A. Revision of declaration in FORM GST TRAN-1.- A registered person who submitted TRAN-1 within time could revise it once within the period specified by the Commissioner. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Legacy one-time revision rule; verify whether relief arises from an order, portal reopening or litigation direction. Rule 121 RULE TEXT / CONSOLIDATED BASE LAYER 121. Recovery of credit wrongly availed.- Transitional credit wrongly credited may be recovered under section 73, 74 or, for the legally relevant later architecture, section 74A, as applicable. CURRENT OPERATIVE CONTROL AT 29 JUNE 2026 Notification 20/2024-Central Tax aligned the rule with section 74A from 1 November 2024. Match the period and allegation before selecting the demand section.
Notifications, circulars and implementation controls Instrument Date/status Why it matters CGST Rules 117-121 and TRAN forms Legacy appointed-day framework Prescribed declarations for carried-forward credit, stock, job work, approval goods and recovery. Notification 48/2018- Central Tax 10 September 2018 Extended/modified transitional declaration mechanisms for specified taxpayers. Notification 02/2020- Central Tax 1 January 2020 Inserted rule 117(1A) and related relief for specified technical difficulties. Union of India v. Filco Trade Centre Pvt. Ltd. Supreme Court orders, 2022 Directed a special GST portal window for TRAN-1/ TRAN-2 filing/revision and officer verification. Circular 180/12/2022-GST 9 September 2022 Issued guidelines for verifying transitional credit claims filed through the Supreme Court-directed window. Notification 20/2024- Central Tax 8 October 2024; relevant change from 1 November 2024 Aligned rule 121 recovery wording with section 74A. Reading rule: Notifications determine class, date and conditions; circulars guide administration but cannot override the Act, Rules, Gazette or binding courts.
CA / finance / professional case studies Case 1: TRAN-1 technical failure Facts: Eligible credit was in the last return, but portal logs show failed filing. Question: What evidence matters? Analysis: Reconcile the last return, ledger, attempted filing screenshots/help-desk record, Supreme Court window filing and verification order. Technical relief does not remove substantive eligibility conditions. References: s.140; r.117; Filco orders Case 2: Capital-goods balance credit Facts: Half of eligible duty credit was taken under the old law. Question: Can the balance transition? Analysis: Apply section 140 capital-goods condition and ensure the balance was admissible both under existing law and GST, with invoice and fixed-asset records. References: s.140(2) Case 3: Stock without duty invoice Facts: A trader held specified goods on 30 June 2017 but lacked duty-paying documents. Question: Is deemed credit automatic? Analysis: No. It depended on the then-applicable provisos, notification/rule conditions, stock statements and sale/payment timelines. Reconstruct the historical scheme rather than applying current ITC rules. References: s.140; r.117
Case 4: Pre-GST inputs at job worker Facts: Inputs sent in May 2017 returned after the statutory transition period. Question: What follows? Analysis: Test section 141 return-time conditions and any permitted extension. If not met, quantify the deemed consequences and reconcile job-worker declarations. References: s.141; r.119 Case 5: Price revision after GST Facts: A pre-GST contract price is increased after 1 July 2017. Question: How is the adjustment documented? Analysis: Issue the statutory supplementary invoice/debit note within the section 142 window and pay GST where required, while preventing duplication with existing-law tax. References: s.142(2) Case 6: Legacy refund order Facts: A pre-GST excise appeal succeeds in 2026. Question: Cash or GST credit? Analysis: Section 142 generally routes the refundable amount in cash under the existing law, subject to unjust enrichment and other preserved provisions; rejected amount does not become GST ITC. References: s.142 Case 7: Legacy demand after adjudication Facts: A service-tax demand becomes final after GST. Question: How is it recovered? Analysis: Recover as an arrear under the existing/GST saving architecture as section 142 directs; do not debit current ITC unless law permits. References: s.142; s.174
Case 8: Return revised after appointed day Facts: An old-law return revision increases credit. Question: Can the increase be taken as GST ITC? Analysis: Apply the specific section 142 revision clause and its time/eligibility limitations. Increases are not automatically transferable merely because the old return was revised. References: s.142(9)
Finin2min Q&A 1. Are transitional credits still a live compliance topic? They are closed for ordinary filing but remain relevant in verification, litigation, recovery and legacy audit. 2. Was every closing credit transferable? No. Section 140 imposed eligibility under both existing law and GST plus documentation and return conditions. 3. What was TRAN-1 used for? Migration of specified carried-forward, stock, capital-goods, job-work and related transitional details. 4. Can a technical portal failure create substantive eligibility? No. Technical relief may reopen filing, but the underlying credit must still be legally admissible. 5. What did the Filco orders do? They directed a special portal window and verification process for TRAN-1/TRAN-2 claims. 6. How are pre-GST goods with job workers handled?
Implementation checklist
- Fix the transaction, taxable period and jurisdiction.
- Read every subsection, proviso, explanation and omission marker.
- Open the mapped Rule, form, notification and circular.
- Test State/UT variation and portal version.
- Preserve evidence, approvals, working papers and acknowledgements.
- Record the conclusion, assumptions, source date and reviewer.
Evidence and retention checklist
- Contract, purchase order, invoice or underlying transaction document.
- Registration, return, ledger, challan and portal acknowledgement.
- Official Act/Rule/notification version used and effective date.
- Internal tax position paper, computation and management approval.
- Correspondence, notices, replies, orders and appeal papers where applicable.
Practical Q&A
- What does section 142 regulate?
- It regulates miscellaneous transitional provisions. Read the exact text, conditions, exceptions and transaction date together.
- Which subordinate law should be checked?
- No direct CGST Rule has been certified in this phase. Notifications, circulars, forms and the corresponding SGST/UTGST layer may also apply.
- What evidence should be retained?
- Preserve the contract or transaction record, invoice or form, portal acknowledgement, payment/ledger evidence, correspondence, legal working and the official source version used.
- Can portal behaviour override the statute?
- No. Portal functionality is operational evidence; legal entitlement and liability remain controlled by the Act, Rules, notifications and binding decisions.