The government has warned the industry to amend any inflated input
tax credit claimed in lieu of taxes paid prior to roll out of goods and
services tax (GST), failing which it will initiate audit and enforcement
action.
“Taxpayers who have claimed transitional credit erroneously are
advised to avail of the opportunity to revise Form TRAN-1 by December
27, 2017 and ensure that only correct and bonafide credit is availed in
transition, failing which the tax administration would be constrained to
initiate audit and enforcement action against the identified units,”
said a finance ministry statement on Tuesday.
The government has already ordered an analysis of the transitional
credit taken by top 100 taxpayers in each jurisdiction. The central
government’s GST collections have been muted, and one reason for the
same is high input tax credit claimed for pre-GST regimes. The Centre’s
revenue on account of GST in July, August, September, and October added
up to Rs 58,556 crore.
“It has been noted that some taxpayers have availed extraordinarily
high transitional credit of CGST which is neither commensurate with the
trend of input tax credit of the industry nor as maintained by the
taxpayer himself in the past,” it said adding that some of these high
transitional credits may have a bonafide explanation or may be a case of
bonafide mistake.
It has been noted that high transitional credit has been claimed in
many cases for which perhaps no bonafide explanation exists. “Analysis
to identify such units is underway. Such behaviour leads to breach of
trust between the taxpayer and the tax-administration, which is the
bed-rock of self-assessment regime in GST,” it said.
A tax payer can file Form TRAN-1and avail input tax credit on the
basis of closing balance of the input tax credit declared in the last
return under the pre-GST regime.
The GST rolled out from July 1. The last date for filing Form TRAN-1
is December 27, 2017, which can also be revised till then. Tax experts
see closer scrutiny of credit claims by authorities in the coming
months.
“Quantum of opening credit claimed has been a concern for the
government,” said Pratik Jain, leader-indirect tax, PwC. It is therefore
nudging businesses to carefully look at their claims and revise it if
needed, he said.
Source
: https://economictimes.indiatimes.com/news/economy/policy/revise-erroneous-credit-claims-under-gst-by-december-27-government-to-taxpayers/articleshow/62039887.cms
