The companies who claimed GST transitional credit of over Rs 1 crore, as more as 162 companies, are under the eyes of tax authorities for the verification of eligibility of claims. In the transitional credit form TRAN-1 filed by taxpayers along with their maiden returns for July, businesses have claimed credit of over Rs 65,000 crore for excise, service tax or VAT paid before the GST was rolled out from July 1. The Central Board of Excise and Customs (CBEC) addressed a letter to Chief Commissioner, for such huge claims, stating 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 credit of more than Rs 1 crore may be verified in a time-bound manner,” CBEC said. CBEC asked the commissioner to prepare and send a report on the claims made by these 162 companies by September 20. It has also asked Field Offices to to match the credit claimed with closing balance in returns filed so as to ensure the credit eligibility.

Reportedly said, till last week as many as 70 per cent of 59.57 lakh taxpayers had filed returns for July resulting in maiden revenue of Rs 95,000 crore under the Goods and Services Tax (GST) regime. However, out of this, the input tax credit (ITC) data for Central GST (CGST) claimed in TRAN-1 has shown that registered businesses have claimed over Rs 65,000 crore as transitional credit.

As per the transition rules, traders and retailers are allowed to claim credit of 60 per cent of taxes paid earlier against the CGST or SGST dues where the tax rate exceeds 18 per cent. In cases where the GST rate is below 18 per cent, only 40 per cent deemed credit will be available against CGST and SGST dues.

Further, the government would also refund 100 per cent excise duty for goods costing above Rs 25,000 and bearing a brand name of the manufacturer and are serially numbered like TV, fridge or car chasis. To avail this, a manufacturer can issue a Credit Transfer Document (CTD) as evidence for excise payment on goods cleared before the introduction of GST to the dealer. The dealer availing credit using CTD would also have to maintain copies of all invoices relating to buying and selling from the manufacturer to the dealer, through intermediate dealers.

Sources –Business Standard

We have launched Single Platform on GST Compliances In India, assisting in 4 areas – 1) Migration, 2) GST Compliance, 3) Training and 4) Transition & Implementation. Click this link for any assistance

______________________________________________________________________________________________________________