Key points
- A CTD was issued by a manufacturer to a dealer during the 2017 transition.
- It covered high-value, branded goods that could be identified individually, such as by a serial or chassis number.
- It let dealers claim credit of excise duty already paid on stock they held on 30 June 2017.
- Dealers using a CTD claimed the credit through TRAN-1.
- 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 problem the CTD solved
Under the old system, a dealer who was not registered under central excise couldn’t take credit of excise duty. Their purchase invoices often showed only VAT, even though the manufacturer had paid excise duty earlier. When GST began, these dealers held stock with excise duty built into its cost but no document to prove it.
For most such dealers, GST offered a deemed credit through TRAN-2, worked out as a percentage of GST paid when the stock was sold. For certain high-value goods, a fuller credit was possible through a credit transfer document.
How the CTD worked
- The dealer held eligible stock on 30 June 2017 High-value, branded goods that could be traced to a specific manufacturer’s clearance.
- The manufacturer issued a CTD Showing the excise duty paid on those goods when they were cleared from the factory.
- The dealer claimed credit in TRAN-1 Using the CTD as the duty-paying document.
- The goods were sold under GST With GST charged as normal, and the transition credit used to pay it.
Who could use a CTD
The scheme was meant for dealers, not registered under central excise, who held goods of significant value per unit that carried a brand name and could be identified individually, such as by an engine, chassis or serial number. Both the manufacturer and the dealer had to be registered under GST. The manufacturer had to keep records linking each CTD to its original clearance, so the same duty could not be claimed twice.
Because the exact conditions were set out in the notified rules and changed little after 2017, anyone dealing with an old CTD claim should check the original notification and any orders in their case with their CA.
CTD compared with TRAN-2
| Credit transfer document | TRAN-2 deemed credit | |
|---|---|---|
| Who issued the proof | The manufacturer | No external proof; based on later sales |
| Goods covered | High-value, branded, individually identifiable goods | Most goods held without duty-paid invoices |
| Credit amount | Linked to the excise duty actually paid | A percentage of GST paid on sale of the stock |
| Where claimed | TRAN-1 | TRAN-1 declaration and TRAN-2 claims |
Why CTD records still matter
- Transition credit claimed using CTDs can still be checked in assessments.
- Officers may ask for the CTD, the manufacturer’s clearance records and the dealer’s stock statement.
- Credit found to be ineligible can be demanded back with interest, subject to time limits.
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.
For the wider picture, see our guides to TRAN-1 and TRAN-2 and Section 140.
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.