The government has set October 31 as the new deadline for the filing of the transitional credit forms under the Goods and Services Tax regime, and has sought to downplay the size of the claims so far received, saying they were commensurate to the claims seen in the pre-GST system.
‘Net’ collections
The government also clarified that the ₹95,000 crore figure it had reported as collections was after incorporating all refunds and credits it had to pay.
“In exercise of the powers conferred by Rule 117 of the Central Goods and Services Tax Rules, 2017, on the recommendation of the Council, the period for submitting the declaration in Form GST TRAN-1 is extended to October 31,” the Finance Ministry said in a notification.
“The earlier notification only extended the TRAN-1 revision date to October 31 whereas the original TRAN-1 had to be filed by September 28,” Abhishek Jain, tax partner, EY India said in an emailed comment. “Vide the new notification, now the taxpayers can file the original TRAN 1 also by October 31 which would be a big relief to taxpayers.”
“While the decision to extend the date for claiming is welcome, business would have appreciated an earlier announcement of the same to enable them to plan their workflows,” M.S. Mani, partner at Deloitte India said.
The government also clarified that the figure of transition credit claimed so far was not ‘incredibly high’ as compared with the closing balance of ₹1.27 lakh crore of credit of Central Excise and Service Tax as of June 30.
“Of course, some of these credits may not be admissible under GST regime, for example, the credits blocked under Sec. 17 (5) of CGST Act or which are not covered under the definition of GST,” the Centre said.“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 assessee to carry forward or utilisation.”
“Credit which may have been eligible in the previous regime but is not eligible under GST cannot be taken forward,” Archit Gupta, Founder and CEO of Cleartax said. “So, businesses must exercise extra caution with complying with this step.”
Looking ahead, the view is that the quantum of tax credits claimed every month are likely to vary, which makes it difficult to gauge whether a particular amount is inordinately large.
“The quantum of transition credits availed would only increase in the future as many businesses would now be filing their transition credit claims and several other may be revising the claims filed,” Mr Mani added. “The credit balances are dynamic in nature and hence it is difficult to be predictive on the correct or appropriate quantum of credit balances.”
