Taxmen to Probe GST Transitional Credit Claims of Over 1 crore
New Delhi: As much as ₹ 65,000 crore out of the nearly ₹ 95,000 crore tax collections in July —the first month of GST — have been claimed as transitional credit by taxpayers, prompting the apex indirect taxes body the Central Board of Excise and Customs (CBEC) to order a scrutiny of all cases above ₹ 1 crore.
The Goods and Services Tax (GST) regime, which kicked in from July 1, allows tax credit on stock purchased during the previous tax regime. This facility is available only up to 6 months from the date of GST rollout. The CBEC, the body which deals with formulation and implementation of policy concerning the levy and collection of indirect taxes, in a letter dated September 11 has asked tax officials to verify GST transitional credit claims of over ₹ 1 crore.
In the transitional credit form TRAN-1 filed by taxpayers along with their maiden returns for July, businesses have claimed a credit of over ₹ 65,000 crore for excise, service tax or VAT paid before the GST was implemented from July 1.
In light of such huge claims, CBEC Member Mahender Singh in a letter to chief commissioners said that as per the GST law, carry forward of transitional credit is permitted only when such credit is permissible under the law.
“The possibility of claiming ineligible credit due to mistake or confusion cannot be ruled out... It is desired that the claims of ITC (input tax credit) of more than .₹ 1 crore may be verified in a time-bound manner,” the CBEC emphasised.
It asked the chief commissioners to send a report to the CBEC by September 20 on the claims made by these companies.