High-value Input Tax Credit claims under CBEC lens
By Express News Service | Published: 16th September 2017 01:29 AM |
NEW DELHI: Alarmed by transitional credit claims to the tune of Rs 65,000 crore out of the nearly Rs 95,000 crore tax collections in July -- the first month of GST -- the Central Board of Excise and Customs (CBEC) has ordered scrutiny of all claims above Rs 1 crore. Transitional credit means carry forward of closing balance of tax credit from earlier indirect tax regime to GST. Under goods and services tax (GST), tax credit is allowed on stock purchased during the previous tax regime for a period of six months from July 1.
The collection in the month of July was based on tax collected under the GST regime. In the transitional credit form TRAN-1 filed by taxpayers for July, businesses have claimed a credit of over Rs 65,000 crore for excise, service tax or VAT paid before the GST was implemented, CBEC officials confirmed.
CBEC has asked tax officials to verify GST transitional credit claims of over Rs 1 crore made by 162 entities. According to CBEC, till last week, 70 per cent of the 59.57 lakh taxpayers had filed returns for July amounting to maiden revenue of Rs 95,000 crore under the GST regime.
“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 Rs 1 crore may be verified in a time-bound manner,” says a letter issued on Monday to chief commissioners by CBEC Member Mahender Singh.
They have been asked to send a report to the CBEC by September 20 on the claims made by these 162 companies.
CBEC officials said the exercise will involve field offices to match the credit claimed with closing balance in returns filed under the earlier law. They will also check if the credit is eligible under the GST laws.