Hyderabad: Tax officials have begun investigating returns filed by traders and firms that have claimed high transitional credits under the Goods & Services (GST) regime.
In TS, traders filed returns of nearly Rs 4,000 crore for July, the first month of GST, but they submitted claims for nearly Rs 2,000 crore in transitional tax credit. GST allows tax credit on stocks purchased during the previous tax regime for a period of six months from the date of implementation of GST.
For the second month, August, returns of Rs 5,000 crore were filed and Rs 3,000 crore claimed back as transitional credit.
Across the country, Rs 95,000 crore was collected in GST for July, while Rs 65,000 crore was claimed back as transitional tax, leaving the Centre with only Rs 30,000 crore.
This prompted the Centre to order an inquiry in all states to verify whether any fake claims were submitted to claim higher amounts from the government under input tax credit on sale of old stocks prior to GST.
About 75 traders across the state are said to have received notices asking them to join the inquiry and explain how they had arrived at the figures.
They were also asked to produce details of tax payments during the past one year in the VAT regime so that the genuineness of their present claims can be assessed when compared to the VAT figures.
Traders to be quizzed on credit
The Central Board of Excise and Customs, in a letter dated September 11, asked chief indirect tax commissioners in all states to verify all transitional credit claims beyond Rs 1 crore.
“Tax officers are summoning chief finance officers or senior officials of companies and individual traders to come to the inquiry and explain how they arrived at the input tax credit they claimed,” said a source in the commercial taxes department.
