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  Business   Companies  16 Sep 2017  Rs 65,000 crore GST credit claims under scanner

Rs 65,000 crore GST credit claims under scanner

PTI
Published : Sep 16, 2017, 7:14 am IST
Updated : Sep 16, 2017, 7:14 am IST

CBEC orders thorough verification of claims over Rs 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.
 The Goods and Services Tax (GST) regime, which kicked in from July 1, allows tax credit on stock purchased during the previous tax regime.

New Delhi: As much as Rs 65,000 crore out of the nearly Rs 95,000 crore tax collections in July — the first month of GST —have been claimed as transitional credit by taxpayers, prompting the 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 in a letter dated September 11 has asked tax officials to verify GST transitional credit claims of over `1 crore made by 162 entities.

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 the 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 162 companies.

To ensure only eligible credit is carried forward in the GST regime, the CBEC has asked field offices to match the credit claimed with closing balance in returns filed under the earlier law.

They are also required to check if the credit is eligible under the GST laws. Till last week, as many as 70 per cent of 59.57 lakh taxpayers had filed returns for July, amounting to maiden revenue of Rs 95,000 crore under the GST regime.

 

However, out of this, the ITC data for Central GST  claimed in TRAN-1 has shown that registered businesses have claimed over Rs 65,000 crore as transitional credit.

The government, in late August, had come out with form TRAN-1 for businesses to claim credit for taxes paid on transition stock. Traders and retailers had 90 days to file for a claim.    

Tags: goods and services tax, cbec
Location: India, Delhi, New Delhi