The finance ministry on Tuesday urged businesses to revise any wrongful claim of tax credits from the previous indirect tax regime saying that “extraordinarily high” claims unsettles the trust between firms and the tax authorities.
In a statement, the ministry warned that assessees who have erroneously claimed tax credit from the previous regime should correct them by 27 December, the last date for doing so, or face consequences.
“Taxpayers who have claimed transitional credit erroneously are advised to avail of the opportunity to revise Form TRAN-1 by 27th December, 2017 and ensure that only correct and bonafide credit is availed in transition, failing which the tax administration would be constrained to initiate audit and enforcement action against the identified units,” said the ministry. The tax authority allowed revision of the form to encourage voluntary compliance.
Tax authorities are examining large claims of tax credits—those above Rs1 crore—carefully. On the basis of the closing balance of tax credits from the previous regime reported in form TRAN-1, businesses could avail tax rebates in the GST regime.
Quantum of opening credit claimed has been a concern for the government. Therefore, the press statement nudges businesses to carefully look at their claims and revise it if needed. Large claims would most likely be scrutinized by the authorities in next few months.
For more information contact us at – www.centrik.in, email@example.com