Skip to main content

Govt might allow revised returns for input credit for pre-GST stocks

Govt might allow revised returns for input credit for pre-GST stocks
Unavailability of the form offline made it difficult for companies to punch in details manually
In a respite for companies with big claims of input tax credit for pre-goods and services tax (GST) stocks, the government is likely to allow rectifications of returns filed. The revenue department is consulting the law committee on the matter.
Although companies have been given 90 days to file the TRAN 1 form to claim input tax credit for stocks bought before July 1, the last date for filing it was August 28.
Unavailability of the form offline made it difficult for companies to punch in details manually, increasing the chances of under reporting or incorrect filing. No provision for rectification of transitional credit claims might mean companies losing credit.
“We are aware of the concerns with respect to rectification of returns. We are consulting the law committee to see if we can allow entities to revise their TRAN 1 form,” said a senior government official.
The TRAN 1 form requires a lot of details such as invoices, making manual filing prone to errors. The clarification will allow companies to rectify the errors they made.
Revenue Secretary Hasmukh Adhia said the matter was being looked into and a decision on rectification would be taken soon.
There were other companies that chose to wait for another month instead of filing incorrect claims, which affected their cash flow for the month. A company that Business Standard spoke to has a claim of Rs 200-300 crore, but did not file it.
“The clarification should ideally have come a little earlier, as the last date for filing TRAN 1 was August 28. Since it was not clear as to whether the return could be revised, a lot of companies have not claimed opening credit for July payment impacting their working capital requirements,” said Pratik Jain of PwC India. 
He added these companies would now claim transitional credit for tax payment of August. 
In fact, Jain said the Rs 92,283-crore GST revenue figure might include an amount that would otherwise be claimed as credit.
The Business Standard, New Delhi, 30th August 2017 

Comments

Popular posts from this blog

RBI minutes show MPC members flagged upside risks to inflation

RBI minutes show MPC members flagged upside risks to inflation Concerns about economic growth and easing inflation prompted five of the six monetary policy committee (MPC) members to call for a cut in the repo rate, but most warned that prices could start accelerating, show the minutes of the panel’s last meeting, released on Wednesday. The comments reflected a tone of caution and flagged upside risks to inflation from farm loan waivers, rise in food prices, especially vegetables, price revisions withheld ahead of the goods and services tax, implementation of house rent allowance under the 7th pay commission and fading of favourable base effect, among others. On 2 August, the panel chose to cut the repurchase rate—the rate at which the central bank infuses liquidity in the banking system—by 25 basis points to 6%. One basis point is one-hundredth of a percentage point. Pami Dua, professor at the Delhi School of Economics, wrote that her analysis showed “a fading economic growth outlook, as …

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

Differential Tax Levy under GST: Food Firms May De-Register Trademarks

Differential Tax Levy under GST:Food Firms May De-Register Trademarks The government’s decision to charge an enhanced tax rate on trademark food brands is leading several rice, wheat and cereal manufacturers to consider de-registering their product trademarks. Irked by the June 28 central government notification fixing a 5 per cent goods and services tax (GST) rate on food items packaged in unit containers and bearing registered brand names, the industry has made several representations to the government to reconsider the differential tax levy, which these players say is creating an unlevel playing field within these highly-competitive and low-margin industries. Sources say that the move has affected the packaged rice industry the hardest and allowed the un-registered market leaders, India Gate and Daawat, to gain advantage as compared to other registered brands such as Kohinoor and Lal Qilla. Smaller players are even more worried with this enhanced rate of tax (against the otherwise …