GST: Govt to assess input tax credit claims of Rs 60,000 crore

The government is in the process of checking the veracity of the around Rs 60,000 crore of claims made by entities for stocks before the implementation of the goods and services tax (GST).

Of the Rs 95,000 crore of revenue collected in July, around Rs 62,000 crore has been claimed as input tax credit for taxes paid for the period before July 1, startling the government. “We need to verify if the claims filed are genuine. The number appears to be quite huge with respect to the tax collected,” said a senior government official.

The input tax credit for the transitional period has been claimed through the TRAN 1 form. Companies had a 90-day period from July 1 to claim credit for the excise duty already paid on inputs.

“We are still evaluating the number of input tax credit claims. It seems to be too large. It is not adding up,” Revenue Secretary Hasmukh Adhia had said at the Business Standard GST Round Table on Wednesday.

The GST Council had allowed companies to claim 100 per cent input tax credit by uploading excise payment invoices for the period before July 1. In case of unavailability of invoices, the Council had allowed 40 per cent input tax credit.

In fact, the limit on input tax credit was raised to 60 per cent from 40 per cent of GST liability on items with a tax rate above 18 per cent at the June 4 meeting. Besides, the entire 100 per cent input tax credit can be claimed on high-value items of above Rs 25,000 with a chassis number.

So far, about 70 per cent of the eligible registrants for July have filed returns and Rs 95,000 crore has been collected in taxes.