Tax Authorities To Scan Transition Credit Claim Of 162 Companies
Transitional credit claim of 162 companies under GST will be verified by tax authorities.
As many as 162 companies that have claimed transitional credit of over Rs 1 crore under the Goods and Services Tax are under the scanner of tax authorities who would verify whether the claims are eligible.
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 GST was rolled out from July 1.
As per GST rules, carry forward of transitional credit is permitted only when such credit is permissible under the law.
The large number of claims has prompted the Central Board of Excise and Customs to raise an alarm. “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 in a letter to chief commissioners.
The top tax officials have been asked to send a report on the claims to the CBEC, which is the apex decision making body for indirect taxes, by September 20.
Till last week, as many as 70 percent of 59.57 lakh taxpayers had filed returns for July resulting in a maiden revenue of Rs 95,000 crore under the new tax regime.
However, out of this, the input tax credit 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 had in late August 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 claims. Also, businesses have been allowed to revise the form once till October 31.
PwC India Partner and Leader (indirect tax) Pratik Jain said the Rs 65,000-crore amount looks high, particularly given the fact that lot of large companies have not yet submitted TRAN-1.
Under the transition rules, traders and retailers can claim credit of 60 percent of taxes paid earlier against the CGST or SGST dues where the tax rate exceeds 18 percent.
In cases where the GST rate is below 18 percent, only 40 percent deemed credit will be available against CGST and SGST dues.
Further, the government would also refund 100 percent 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 chassis.