New Delhi Businesses are set to get credit for taxes paid in the pre-Goods and Services Tax (GST) era. 400 crore, the government is set to open a special window for businesses to file their claims from October 1.
With this, businesses that could not avail credit on Central Excise Duty and Value Added Tax (VAT) at the time of transition to GST in 2017, including those who had not filed their claim at that time, will get a new benefit. will get. A chance to get their tax credit.
Once the claim is accepted, the quantum of tax credit given will help them reduce their future tax liability.
“Based on the information we have, the estimated amount is approximately 400 million. We are waiting for the window to open so that people can start filing claims.”
The GST transitional credit attempts to address a pain point in the shift towards the new tax system, as mandated by the Supreme Court. During the transition to the new unified national indirect tax system, many companies encountered disruptions in their business activity, while the new procedures remained unfamiliar, causing many businesses to not claim credit for taxes paid in the previous tax regime. . Also, there were glitches in the IT system then, which have now been rectified.
As per the latest plan, the Goods and Services Tax Network, a company that processes tax returns, will open a new window for two months from October 1 to accept tax credit claims.
The tax authorities will examine and decide the eligible credits on individual matters.
The decision to give businesses a new opportunity to claim their transitional tax credit is based on a Supreme Court order.
The apex court had ordered keeping the window open for two months from September, but on September 2, granted an additional four weeks as the IT system has to prepare for it without creating any problem for the monthly tax return filing cycle. was required.
Abhishek A Rastogi, Partner, Khaitan & Co. said, “It is always better to open the GSTN portal in a strong shape to process the claims of GST transitional credit so that it is easier for the claimants to file their claims.” Payer in case in Supreme Court.
“There are some peculiar issues pending in the High Courts on the subject of transitional credit and it is of great significance for the courts to decide on them and bring more clarity on the eligibility of transitional credit,” Rastogi said.
Giving an additional time of four weeks to the Center earlier this month to start accepting these tax credit claims, the top court also ordered to keep open all questions of law laid down by high courts relating to transitional GST credit. Gave. This would mean that cases, particularly those where the rules for transitional loans and subsequent amendments were challenged, would have to be argued on merit.
According to experts, the GSTN will accept the claims of tax credit and the tax authorities will decide on them, the cases in which the eligibility of the credit is in question will be heard in the courts.
The CBIC on September 9 issued instructions to senior officers to clarify the procedures and timelines while deciding these tax credit claims.
It said taxpayers can file either a new form or a modified version of the old form for GST transitional credit on the common portal.
Businesses are also required to submit self-attested copies of the form within a week of filing online and no modification will be allowed after filling the form.
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