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GST: Baffled tax department to probe Rs 65,000 cr credit claims of traders

IANS  |  New Delhi 

Transitional credit claims worth a whopping Rs 65,000 crore received from traders under have stumped the and the authorities are now preparing to check the veracity of claims of over Rs 1 crore.

The Central Board of Excise and Customs (CBEC) has asked its officials to verify all transitional credit claims for more than Rs 1 crore as it does not rule out ineligible claims "due to mistake or confusion".

If the entire Rs 65,000 crore transitional credit claims are found genuine, it could burn a deep hole into the anticipated revenue collections under Apart from transitional credit, would also receive claims for input credit, the figure of which is not yet known. Finance Minister Arun Jaitley had said that the had collected Rs 95,000 crore as for July with 64 per cent compliance.

"The statement received from Network revealed that so far, the registered persons have claimed over Rs 65,000 crore as CGST transitional credit. The possibility of claiming the ineligible credit due to mistake or confusion cannot be ruled out. Accordingly, it is desired that the claims of credit of more than Rs 1 crore may be got verified in a time-bound manner," Mahender Singh, Special Secretary and Member, CBEC, has written in a letter to Chief Commissioners across the country.

A list of assessees in the Delhi region, who have claimed more than Rs 1 crore as credit in their Tran-1 showed a firm even claiming up to Rs 228.82 crore as transitional credit.

"The carry-forward of transitional credit is permitted only when such credit is also permissible under the Goods and Services (GST) law. It is required that such credit be verified to ensure that only eligible credit is carried forward," Singh said in the letter.

Such a verification would include matching the credit claimed with closing balance in returns filed under the earlier laws and checking the eligibility of credit under regime.

"It is desired that the same should be done at the earliest with regard to assessees under your jurisdiction and a report sent to this office by September 20," the letter says.

The transitional credit claims of Rs 65,000 crore are only for Central The states may also follow a similar examination and verification process of claims received under State

Listing out the key reasons for the staggering claims of transitional credit, expert Pritam Mahure told IANS: "One, it could be pertaining to closing stock lying with the manufacturers and traders (such as cars and electronics lying with dealers).

"Second, in certain cases, due to invert duty structure (mainly in pharmaceutical industry), many taxpayers had substantial excise duty credit balances, which may have been claimed as transitional credits. Third, the had allowed traders to avail excise duty credit on the one-year-old stocks, which was not available to them earlier."

Experts also suggested that traders should themselves review their claims, before the initiates scrutiny and subsequent action.

"The seems to have concerns with input credits claimed in TRAN-1 forms by taxpayers and thus, it is advisable that the taxpayers should immediately get these credits independently reviewed to avoid subsequent penal implications on inadvertently claimed credit," Jigar Doshi, Partner, SKP Business Consulting, said.

--IANS

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, September 15 2017. 15:44 IST
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