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162 businesses with transition credit claim of over Rs 1 cr under tax lens

CBEC said that as per GST law carry forward of transitional credit is permitted only when such credit is permissible under the law

Press Trust of India  |  New Delhi 

Illustration by Ajay Mohanty
Illustration by Ajay Mohanty

As many as 162 that have claimed transitional credit of over Rs 1 crore are under the scanner of 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 or VAT paid before the was rolled out from July 1.


In view of such huge claims, the (CBEC) in a letter to chief commissioners said that as per the carry forward of transitional credit is permitted only when such credit is permissible under the

"The possibility of claiming ineligible credit due to mistake or confusion cannot be ruled out ... It is desired that the claims of credit of more than Rs 1 crore may be verified in a time-bound manner," CBEC said.

It asked the chief commissioners to send a report on the claims made by these 162 to the CBEC, which is the apex decision making body for indirect taxes, by September 20.

To ensure that only eligible credit is carried forward in the regime, the CBEC has asked field offices to match the credit claimed with closing balance in returns filed under the earlier They would also check if the credit is eligible under the laws.

Till last week as many as 70 per cent of 59.57 lakh taxpayers had filed returns for July resulting in a maiden revenue of Rs 95,000 crore under the Goods and Services (GST) regime.

However, out of this, the input credit (ITC) data for Central (CGST) 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 time to file for claim. 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 have not yet submitted TRAN-1.

Under the transition rules, traders and retailers are allowed to claim credit of 60 per cent of taxes paid earlier against the or dues where the rate exceeds 18 per cent.

In cases where the rate is below 18 per cent, only 40 per cent deemed credit will be available against and dues.

Further, the government would also refund 100 per cent 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 chasis.

To avail this a manufacturer can issue a Credit Transfer Document (CTD) as evidence for excise payment on goods cleared before the introduction of to the dealer.

The dealer availing credit using would also have to maintain copies of all invoices relating to buying and selling from the manufacturer to the dealer, through intermediate dealers.

First Published: Sat, September 16 2017. 00:59 IST
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