The finance ministry today asked taxpayers who have claimed transitional credit "erroneously" under the GST to file revised Form Tran-1 by December 27 or face enforcement action.
The shift to Goods and Services Tax (GST) provided for trust-based transition of input tax credit of the existing taxpayers, it said in a statement.
A taxpayer could file Form TRAN-1 and avail input tax credit on the basis of closing balance of the input tax credit declared in the last return under the pre-GST regime.
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It has been noted that some taxpayers have availed of extraordinarily high transitional credit of CGST which is neither commensurate with the trend of input tax credit of the industry nor as maintained by the taxpayer himself in the past, it said in a statement.
The ministry said that some of these high transitional credits may have a bona fide explanation or may be a case of bona fide mistake.
"However, it has been noted that high transitional credit has been claimed in many cases for which perhaps no bona fide explanation exists. Analysis to identify such units is underway," it added.
"Such behaviour", the ministry added, leads to breach of trust between the taxpayer and the tax-administration, which is the "bed-rock of self-assessment regime" in GST.
It further said that taxpayers who have claimed transitional credit erroneously are advised to avail of the opportunity to revise Form TRAN-1 by December 27, 2017 and ensure that only correct and bona fide credit is availed in transition.
"...failing which the tax administration would be constrained to initiate audit and enforcement action against the identified units," it added.
In keeping with the "philosophy" of voluntary compliance, revision of Form TRAN-1 has also been provided and last date for it is December 27.
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