Tax­men to Probe GST Tran­si­tional Credit Claims of Over 1 crore

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

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.

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