GST Authority Cannot Give Rulings on Pre-GST Transitional Credits
The Andhra Pradesh GST Advance Ruling Authority decided it lacks legal power to answer questions about pre-GST transitional input tax credit.
- Ruling
- Order/AAR/AP/04(GST)/2018 dated 26.06.2018
- Dated
- 26 Jun 2018
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- A mining firm asked to claim unavailed pre-GST duties as GST input credit.
- The tax authority rejected the application without answering the main question.
- Advance ruling authorities cannot decide matters involving pre-GST taxes.
- Transitional credits under Section 140 fall outside the advance ruling scope.
In short
NSL Mining Resources India Private Limited bought capital equipment before GST started on July 1, 2017. They paid old taxes, including Central Excise duty and VAT, but never claimed credit for them under the old laws. The company asked the Andhra Pradesh Authority for Advance Ruling (AAR) whether they could claim this unavailed pre-GST tax credit under Section 140(2) of the Goods and Services Tax (GST) Act. Order AAR/AP/04(GST)/2018 covers this decision.
What has changed
How it worked before
Many businesses assumed they could use the GST advance ruling mechanism to confirm whether old, unclaimed pre-GST tax credits could be safely carried forward into GST.
What has changed
The authority rejected the application at the admission stage without deciding whether the tax credit was valid. It ruled that advance ruling authorities can only answer questions about taxes charged under GST laws, not old pre-GST taxes like Excise or VAT. In practice, this means businesses cannot use an advance ruling to clear their pre-GST transitional credit claims.
Who this affects
Businesses in India that have unavailed tax credits from the pre-GST regime and want official confirmation before carrying them forward.
An example
A factory owner in Andhra Pradesh bought heavy machinery in May 2017 and paid Central Excise duty. They forgot to claim CENVAT credit under the old law and wanted to bring it into GST. If they ask the advance ruling authority for approval, the authority will reject the application without reviewing the documents. The factory owner must instead present their tax records directly to their regular GST officer during audits.
What you should do
Do not file a GST advance ruling application to clarify pre-GST transitional credit claims, as the authority will reject it for lack of jurisdiction. Remember that an advance ruling legally binds only the business that applied and its local tax officer. Businesses with doubts about old tax credits must address them directly with their jurisdictional tax officer during routine assessments.
If you do nothing
If you apply for an advance ruling on pre-GST credits, you will spend time and legal fees on an application that gets rejected without an answer. If you go ahead and claim unapproved transitional credit on your tax returns, your local tax officer can issue a demand notice with interest and penalties.
The terms explained
- Transitional credit
- Tax credit for duties or VAT paid under old pre-GST laws that a business seeks to carry forward into the GST system.
- Input tax credit
- A system that lets a business reduce the GST it owes on sales by the amount of tax it has already paid on purchases.
- Authority for Advance Ruling
- An official panel where a business can ask tax authorities for a binding legal opinion on a GST question before doing a transaction.
The ruling in detail
Authority for Advance Ruling
M/s NSL Mining Resources India Private Limited
Order/AAR/AP/04(GST)/2018 dated 26.06.2018 · Andhra Pradesh
Questions before the authority
- Whether Excise duty, CVD and SAD paid on Capital Goods purchased prior to July 1st 2017 on which CENVAT credit has not been claimed earlier, can be claimed U/s 140(2) of the CGST Act, 2017 in the absence of registration under Central Excise Act?
- Whether VAT paid on Capital Goods purchased prior to July 1st 2017 on which Input Tax Credit has not been claimed earlier, can be claimed U/s 140(2) of the Andhra Pradesh GST Act, 2017?
Facts
The applicant is engaged in procuring low-grade iron ore from third-party miners, upgrading its quality through a beneficiation process, and selling the upgraded product. Prior to July 1, 2017, the applicant purchased capital goods and paid Central Excise duty, CVD, SAD, and VAT, for which credit had not been claimed under the earlier laws. The applicant sought an advance ruling to determine whether transitional credit for these unavailed pre-GST duties and taxes could be claimed under Section 140(2) of the CGST Act, 2017 and APGST Act, 2017.
Ruling
The Authority for Advance Ruling **refused to admit the application** under Section 98(2) of the CGST Act, 2017 and APGST Act, 2017. It held that questions concerning transitional credit under Section 140 do not fall within the scope of Section 97(2)(d) or any other clause under Section 97(2). Consequently, the merits of whether transitional credit on capital goods could be claimed were not adjudicated.
Reasoning
The Authority examined the admissibility of the application under Section 97(2)(d) of the CGST Act, 2017, which relates to the admissibility of input tax credit of tax paid or deemed to have been paid. It observed that 'input tax' as defined under Section 2(62) refers strictly to taxes chargeable under the CGST, SGST, UTGST, or IGST Acts. The transitional credits claimed under Section 140 pertain to duties and taxes paid under pre-GST enactments such as Central Excise, Customs, and state VAT laws, rather than GST enactments. Therefore, the determination of eligibility for transitional credit does not fall within the purview of Section 97(2)(d) or any other enumerated clause under Section 97(2). As the questions raised were beyond its jurisdiction, the Authority held that the application was **not admitted** under Section 98(2).
Provisions relied on
- Section 2(62) of CGST Act, 2017
- Section 97(2)(d) of CGST Act, 2017
- Section 97(2) of APGST Act, 2017
- Section 98(2) of CGST Act, 2017
- Section 98(2) of APGST Act, 2017
- Section 140(2) of CGST Act, 2017
- Section 140(2) of APGST Act, 2017
For the practitioner
This ruling establishes that issues concerning **transitional credit under Section 140 fall outside the jurisdiction** of the Authority for Advance Ruling under Section 97(2) of the GST Acts. Taxpayers cannot use the advance ruling mechanism to seek rulings on carrying forward unavailed pre-GST taxes or duties. Such issues must be raised through regular assessment and statutory proceedings before jurisdictional officers.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/ap_04-2018_26.06.18_nsl_miningripl.pdf
Legibility of the scan, as read: high.
Prepared 19-10-2026.
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