Government is likely to allow rectification of returns filed by the companies for claiming the input tax credit for pre-goods and services tax (GST) stocks. The revenue department is consulting the law committee on the matter.

The companies were given a time span of 90 days to file the Form TRAN 1 to claim input tax credit for stocks bought before July 1, the last date for filing it was August 28. However, the Form was no available offline thereby making it difficult for companies to furnish all the details in correct form and increasing the chances of under – reporting or miss- reporting of data. In such case, no provision for rectification of transitional credit claims might mean companies losing credit.

“We are aware of the concerns with respect to rectification of returns. We are consulting the law committee to see if we can allow entities to revise their TRAN 1 form,” said a senior government official.

Hasmukh Adhia, Revenue Secretary, added that the matter is into discussion and a decision on the same shall be taken soon by the officials.

Reportedly said, many of the companies due to lack of the above clarifications opted not to file the return for a month with incorrect claims thereby effecting the cash flow for the month. One of the companies with 200- 300 crore of ITC is an example of such case which has not filed the return yet. This has affected the working capital requirements of the companies. These companies would now claim transitional credit for tax payment of August.

Sources –Business Standard

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