CBEC has allowed a grace period till 27 December 2017 to taxpayers who claimed transitional credit incorrectly. The board has advised the taxpayers to file a revised Form TRAN-1 and ensure that the mentioned Input Tax Credit (ITC) abides by the true data. Failing to rectify the incorrect claim can land the taxpayers under tax audit or enforcement of other legal actions.
As per the findings of CBEC, some returns have claimed an extraordinary transitional credit of CGST. The claim is neither supported by authentic records nor any concrete explanation by the taxpayer himself. Hence, the situation is considered as a bona fide mistake by the taxpayers.
The department has also scrutinized some GST returns where transitional credit has no explanation from the taxpayer and hence, they have been put under review.
Tax payment signifies a relationship based on trust between the tax payer and the tax authority. The department believes that the tax payer has mentioned information which is true to his/her knowledge. There has not been any attempt to manipulate the existing figures and deceive the department. However, in the present case CBEC has been forced to believe that returns were filed with incorrect figures and with strong motives to evade taxes. This is why, CBEC has allowed an opportunity to taxpayers whereby they can rectify their mistake and file a revised Form TRAN-1 on or before 27 December 2017.
Download CBEC Advisory Press Release for Filing of Tran-1 to Claim Input Tax Credit – Published on 12th December 2017 – Download Here