Deadline to file transitional credit under GST extended to Oct 31

Following the decision of the GST Council earlier this month, “these notifications also provide that this 5 per cent GST will, however, not apply if the person concerned voluntarily foregoes any actionable claim or enforceable right on such brand name”, a Finance Ministry release said here on Friday.

This figure of transition credit claimed is also “not incredibly high” as Rs 1.27 lakh crore of credit of central excise and service tax was lying as closing balance as on June 30, 2017, the statement said.

The scheme would allow exporters to get their refunds in three days.

“But, in the meantime, we are also finding other ways of giving refund, if necessary through a manual procedure”, it said.

Over 46 lakh businesses have paid taxes to the tune of Rs 95,000 crore in July.

“Tax authorities are only verifying transition credit claim“.

Tax experts say that the reason behind so many ineligible claims being submitted was the constantly changing rules and deadlines relating to the form for the availing of transitional credit – the TRAN-1 form -and that the audits being conducted so far were causing undue panic among businesses since the deadline to revise the filings is still more than a month away. Federation of Indian Export Organisations (FIEO) had claimed that if refunds do not start flowing immediately, then about Rs 60,000-65,000 crore would be stuck by the end of October.

The high claim had also led to apprehensions that the government would not have much left after these claims are adjusted. This facility is available only up to 6 months from the date of GST rollout.

The government’s clarification came after it was revealed that traders had claimed Rs 65,000 crore as transitional credit, which could hit the revenue collections under GST. Also, some of the credits, which are claimed in TRANS 1 form may be under litigation and, therefore, it may not be available to the assesse to carry forward or utilisation.

TRAN-1 allows traders to claim input credit from the previous indirect tax regime.

“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”.

“The revised order clearly states that the period for submitting TRAN-1 is extended up to October 31”. However, a subsequent government notification was worded in such a manner that it meant taxpayers could file their TRAN 1 only till September 28th and only revisions to what was originally filed would be allowed till October 31.

The government today said it would return Rs 12,000 crore as transitional credit to businesses in July, the first month of the GST, against claims to give back Rs 65,000 crore.

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