GST: Valid transitional credit claims just Rs 12K cr: Govt

Source: The Hitavada      Date: 23 Sep 2017 11:04:20


NEW DELHI,

Sept 22,

(PTI),

THE Government has come out with an estimate that valid transitional credit claims of taxpayers in July -- the first month of GST -- are just Rs 12,000 crore and not Rs 65,000 crore as previously claimed. As much as Rs 65,000 crore out of the about Rs 95,000 crore tax collections in July had been claimed as transitional credit by taxpayers, but a close scrutiny had brought down the valid claims to Rs 12,000 crore, a Finance Ministry official said.

The Goods and Services Tax (GST) regime, which kicked in on July 1, allows tax credit on stock purchased during the previous tax regime. This facility is available only upto 6 months from the date of GST rollout. The high credit claim prompted the Central Board of Excise and Customs (CBEC), the body that deals with formulation and implementation of policy concerning the levy and collection of indirect taxes, to verify GST transitional credit claims of over Rs 1 crore each made by 162 entities. “Tax authorities are only verifying transition credit claim. They are not going after any taxpayer,” the official said.

No credit on education cess, telecom towers, as claimed by some, was allowed, he said while explaining the figure. Earlier in the day, the Finance Ministry issued a statement to allay concerns about high transitional credit claims, saying the Centre’s revenue kitty will not go down because of these claims.

Over 46 lakh businesses have paid taxes to the tune of Rs 95,000 crore in July. However, businesses also claimed credit for the past taxes paid in the form of Excise and Service Tax worth Rs 65,000 crore. 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 statement said. It clarified that credit claimed by taxpayers in TRAN-1 form does not mean they would have used all of this credit for payment of their output tax liability for July 2017.