Taxpayers Can Avail Disputed Tax Credits From the Pre-GST Era
GST Revenue

The Punjab and Haryana High Court passes an order making way to carry forward VAT input credits and CENVAT credit to the GST regime for those taxpayers who could not complete their filing of claims or made incorrect claims. The High Court passed this order on the basis of 102 writ petitions that were filed with the court concerning the same issue.

The issue is with relevance to denial of unutilised CENVAT/tax paid/ITC of duty under the VAT Act/Central Excise Act by the indirect tax authorities due to wrong filing/non-filing of claims as mentioned under the GST law.

The petitioners had claimed that the unused CENVAT/tax paid/ITC of duty under the Central Excise Act/VAT Act is a right of every petitioner and it cannot be denied considering the constitutional spirit of treating everyone equally before the law. They also alleged that if VAT input credit/CENVAT Credit is not permitted, it will lead to double taxation.

Also Read: Demand for Timber Decreases Due to High GST Rate of 18%

With this order passed by HC, transitional credits which are the input tax credits that are available to a taxpayer under the pre-GST regime will be allowed to be carried forward to the GST regime. In accordance with the same, HC has instructed the government to permit petitioners to either file or revise TRAN-1 form on/prior to 30 November 2019.

The tax professionals will have the authority to validate the correctness of the petitioner claims. However, they will not be allowed to deny a legitimate claim on the basis of a taxpayer not filing his/her TRAN-I by 27 December 2017.

This ruling will prove to be a benefit to several taxpayers who could not file their TRAN-1 form or filed an incorrect TRAN-1 form because of various reasons. Nevertheless, it’s going to have a considerable impact on the government exchequer; it might also result in the submission of illegal transitional credit claims.

For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

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