Economy

Deadline to file transitional credit under GST extended to Oct 31

Deadline to file transitional credit under GST extended to Oct 31”

The official pointed out that even where claims were accepted, refunds would be done in a staggered manner over months, and not as a single lump sum. It said that for 66 per cent value of exports, exporters have preferred the duty drawback scheme instead of taking actual refund of input taxes in the pre-GST regime.

The ministry also said it has chose to refund Rs 600 crore in taxes to exporters in the next few days.

The finance ministry in a statement said this figure of transition credit claimed is also "not incredibly high" since Rs. 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on June 30, 2017. The ministry is also working on a refund scheme that will ensure the payments to the exporters in a systematic fashion.

Further, giving clarification on credit claimed by taxpayers, the Ministry said Rs 95,000 crore has been received in the month of August for GST. Exporters had in a representation to the government claimed that Rs 65,000 crore could get stuck by the end of October if duty refunds to not start flowing immediately.

This prompted the Centre to order an inquiry in all states to verify whether any fake claims were submitted to claim higher amounts from the government under input tax credit on sale of old stocks prior to GST.

The government also allayed concerns over reports that taxpayers have claimed Rs 65,000 crore of tax credit for central excise and services in pre-GST period and government revenues will take a hit.

"About Rs 600 crore will be refunded in the next few days. They know these claims are not eligible, but still they try". This facility is available only up to 6 months from the date of GST rollout.

The tax department had collected Rs 95,000 crore GST in July, of which businesses had sought a return of Rs 65,000 crore.

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

GST council has clarified that deadline for submitting GST TRAN 1 has been extended till 31st October.

Assessees who have committed mistake in filing the form will be given the facility to revise TRAN-1 form by middle of October that will remain available till the October 31 deadline for filing TRAN-1 form.

Abhishek Jain, tax partner at EY India, said: "It would be interesting to see how much of the Rs 65,000 crore (transitional credit claimed) has been utilised against July (tax) liability and how much balance credit has been carried forward by the taxpayers, as this would give better clarity on the overall GST collections of the government". "It is from this angle that the CBEC is examining the transition credits, which are claimed by the assessees in TRANS I form in certain cases", the ministry added.



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