Comments
Tax officials and experts are confused by claims of over ₹65,000 crore as transitional credit for Central Goods and Services Tax (CGST) for July.
These claims from the pre-GST era could have some impact on revenue collections from the new tax as many of these would have to be offset in the August’s payments.
Puzzled by the huge credit claims from the TRANS-1 statement, the Central Board of Excise and Customs (CBEC) has now asked its officials to verify claims of credit of over ₹1 crore.
TRANS-1 is the form that businesses had to file to claim transitional credit under GST.
“The possibility of claiming ineligible credit due to mistake or confusion can not be ruled out,” said the CBEC in a missive, asking its field formations to check that only eligible credit has been carried forward.
For the specified high value cases, officials have to check whether the credit claimed matches the closing balance in returns filed under pre-GST laws. A report has to be sent by September 20. The issue was first discussed at the meeting of the GST Council in Hyderabad earlier this month while reviewing the tax collections under GST.
Sources said that the Council, chaired by Finance Minister Arun Jaitley too had found the numbers puzzling as they did not seem correct when contrasted with the actual collections of over ₹92,000 crore in July. Of this, receipts from Central GST was over ₹14,894 crore and State GST was about ₹22,722 crore in July.
“This number is very surprising as many companies could not file TRANS-1 as it had to be filed manually,” said Pratik Jain, Partner and leader (indirect tax), PwC, adding that the government will have to work out how the large claims will be verified. To ease over transition problems for manufacturers and dealers who moved from the regime of excise duty and value added tax, the government had allowed them to carry forward input tax credit from January to June 2017 into GST. In fact, to take care of transitional stocks of white goods and automobiles, the GST Council had allowed carry forward of the full amount of input tax credit for items costing over ₹25,000 and having a serial number.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.