The Finance Ministry has concluded that several businesses have claimed high transitional input tax credit under the GST regime without any bonafide explanation to back such claims. The conclusion was arrived on the Central Board of Excise and Customs (CBEC) enquiry who had three months ago asked its chief commissioners to specifically verify claims of input tax credit of more than Rs1 crore in a time-bound manner.
The ministry said that some taxpayers have availed 'extraordinarily high transitional credit' of Central GST which is neither commensurate with the trend of input tax credit of the industry nor as maintained by the taxpayer himself in the past.
The Revenue Department has, therefore, given an opportunity for those taxpayers who have claimed transitional credit erroneously to revise their Form TRAN-1by December 27. Further, an official release of the Finance Ministry has said that failure to revise TRAN-1 by December 27 would “constrain” the tax administration to initiate audit and enforcement action against the identified unit. A tax payer could file Form TRAN-1 and 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.