Key aspects are stated below:
- Credit verification to be remain the primary focus area during Fy 18-19.
- Credit verification to take place by CGST authorities even if the jurisdiction is with state
- Credit of KKC/SBC/E cess is not eligible
- Each line wise data in Tran-1 to be verified in detail
- Supporting documents and other info to be sought from assessee
- Credit taken in excess of INR 25 Lakhs is being verified
- List of 50000 assessee is being targeted for initial verification
Fundamental principals should be kept in sight while verification
- Only such CENVAT credit can be taken as credit of CGST in the electronic credit ledger by filing TRAN1 for which explicit legal authority exists in section 140 of CGST Act.
- CENVAT credit cannot be availed as transitional credit twice.
- One more factor which needs to be verified is the growth of CENVAT credit in the period September, 2016 to June, 2017.
Data availability: five sets of data have been uploaded on Antarang at the address for verification.
- TRAN-1 data in respect of top 50,000 taxpayers in terms of availing TRAN Credit Data entered in individual tables and the total CGST credit posted in their ledger has been provided in this data table.
- Past data pertaining to closing balance of CENVAT credit, as per ER-1/ST-3 returns, is also uploaded for the same PAN as they appear in the 50,000 GSTINs relating to data above (i), has also been uploaded.
- Many times one registration of pre-GST era can get converted into many and vice-versa and therefore PAN wise summary of the closing balance of credit has also been uploaded vis-a-vis TRAN credit availed.
- Taxpayers who have shown steep growth in credit over 25% and have availed credit of more than Rs. 25 lakh amongst this list of 50,000 top TRAN credit takers has also been uploaded. Reason for this excessive growth may be ascertained and informed in due course to the Board.
- List of taxpayers who have taken registration between 1st October 2016 and 30th June 2017 and are entities other than limited companies (i.e. these taxpayers lie in the category of proprietors, LLPs, HUFs etc)
- Jurisdiction: CGST officer of the Central Government shall have the jurisdiction for verification of Transitional Credit of CGST irrespective of whether the taxpayer is allotted to the Central Government or the State Government for the purposes of GST.
Procedure for Verification:
- First verification will be done on the basis of data already available with the department without contacting the taxpayer.
- A letter may be written giving adequate lead time and calling for specific information to tax payer, whereever required.
- Summon should be issued only where the taxpayer is not sharing information even after repeated requests and lapse of an unreasonable period of time.
- Enforcement action can be taken in below cases:
- where the transitional credit is very high and not congruent with the economic activity of the taxpayer
- the said taxpayer is not cooperating with the verification even after giving adequate opportunity
- there are other collateral evidence of wrong availment of TRAN Credit and there are chances of his disappearing after utilising the credit.