Key points
- Section 140 allowed old CENVAT credit (into CGST) and VAT credit (into SGST) to move into GST.
- Credit had to be allowed under GST, and old returns for the previous six months had to be filed.
- Businesses not registered under the old law could claim credit on stock with invoices up to 12 months old.
- Goods and services in transit on 1 July 2017 were also covered.
- The 2017 transition windows are closed. This guide is for understanding old records, assessments and disputes, and for lessons that still apply when tax rules change.
The basic rule
A registered person, other than one choosing the composition scheme, could carry forward the CENVAT credit shown in their last return under the old law as CGST credit. The same applied to VAT credit carried into SGST under the state laws. The claim was made through TRAN-1.
Conditions
- The credit had to be admissible as input tax credit under GST.
- All returns under the old law for the six months before 1 July 2017 had to be filed.
- The credit could not relate to goods cleared under certain exemption notifications.
Section 140 part by part
| Sub-section | Who it helped | What could be claimed |
|---|---|---|
| 140(1) | Registered persons under the old law | Closing CENVAT credit from the last return |
| 140(2) | Manufacturers and service providers with capital goods | Capital goods credit not yet availed under the old law |
| 140(3) | Persons not registered earlier, dealing in exempt goods, dealers and importers | Credit on inputs in stock (including semi-finished and finished goods), with invoices up to 12 months old |
| 140(4) | Those making both taxable and exempt supplies under the old law | Credit on stock related to supplies newly taxable under GST |
| 140(5) | Anyone with goods or services in transit | Credit on inputs received after 1 July 2017 where tax was paid before, if recorded within 30 days |
| 140(6) | Those paying tax at a fixed rate under the old law | Credit on stock when moving to regular GST |
| 140(7)–(8) | Input Service Distributors and centralised registrations | Credit on services received before GST and distributed after |
Credit on stock: the most used part
Traders who were not registered under central excise had no CENVAT credit, but the goods they held had excise duty built into their cost. Section 140(3) let them claim that duty on stock held on 30 June 2017 if:
- The goods were used for taxable supplies under GST
- The business would have been eligible for credit under GST
- It had invoices or other duty-paid documents
- The invoices were issued within 12 months before 1 July 2017
- The supplier had not used an abatement scheme that blocked credit
Where duty-paid documents were not available, a deemed credit could be claimed through TRAN-2, and for some high-value branded goods a credit transfer document from the manufacturer could be used.
Time limits
The rules set a time limit for filing TRAN-1, and the law was later amended (with effect from 1 July 2017) to make clear that claims had to be made within the time set by the rules. After several extensions for technical problems, the Supreme Court ordered a final window from 1 September to 31 October 2022. No general window is open now.
The 2017 transition windows are closed. This guide is for understanding old records, assessments and disputes, and for lessons that still apply when tax rules change.
Where Section 140 claims went wrong
- Credit not admissible under GST: some credits allowed under the old law, such as on certain vehicles or services, were blocked under GST and could not move across.
- Missing old returns: the six-month return condition was not met.
- Stock without proper documents: invoices were missing, older than 12 months, or did not show the duty paid.
- Goods in transit recorded late: inputs received after 1 July 2017 were not entered in the books within 30 days.
- Capital goods credit already used: credit claimed under Section 140(2) had in fact already been taken under the old law.
Officers verifying these claims usually ask for the last returns under the old law, the stock statement on 30 June 2017 and the supporting invoices, so those records are worth keeping safe.
Why Section 140 still matters
- Transition credit claims, especially large ones, continue to be verified and disputed.
- Demands can be raised for credit found to be ineligible.
- Appeals on transition credit are still being decided.
For special situations like job work, goods returned and long-term contracts, see our guide to Sections 141 and 142.
This guide explains GST rules in simple words and reflects the law as we understand it on 28 October 2026. Rules, rates and dates change, so please confirm with your CA or the official notifications before acting on it.