For non-technical errors, companies will soon be able to modify the GST (Goods and Services Tax) return claimed for moving forward the tax credit from the former reign. To bring up a solution and giving the businesses a relief, the GST Council ordered a committee for IT grievance redressal.
Because of the minor mistakes made while filing the GST returns, the tax credit which was claimed by the companies was rejected due to which many of them are contacting judiciary. This step taken will be a pardon for the businesses whose credit was lost just because of the insignificant, non-IT errors.
A government official who knows the deliberation told, “The council has approved changes in cases where the error is not IT related”. He also said that the court has given directions to solve the errors, wherever they are more.
The grievance committee will develop a standard operating procedure for all the cases where the amount has been filled incorrect, ordered by the high court or the relevant jurisdictional commissioner made a recommendation applicable on the transaction. To allow this, the TRAN 1 and TRAN 2 forms which are known for claiming old credits can now be modified.
For TRAN 1 and TRAN 2 issues, there is no appeal by the Goods and Services Tax (GST) law due to which writs were filed in high court by many taxpayers and also for assurance of the orders which states that the genuine errors which are given by the government must be in consideration. To allow the modification, many taxpayers urged the GST Council and the government.
Pratik Jain, national indirect taxes leader, PwC said “Lot of companies could not claim the entire eligible opening credit under TRAN 1 due to inadvertent errors. This move will help them to claim the additional amount, without going to courts, which some of them have already opted for.”
TRAN1 have to be filed by the businesses who want to claim the tax credit under GST before the GST period and till December 27, 2017, the modification in TRAN 1 was allowed. Many companies lost a high amount of credits because they missed upgrading it and even the minor errors.
Instead of taxes paid under the former reign, one can claim credits because the GST Council allowed a liberal scheme against GST (Goods and Services Tax) liabilities. Under the deemed benefit provision, the company can claim the credit even if they do not have any proof of payment. However, hefty transition claims spurred action from the department for added vigilance on the claims. On non-IT issues, there was no modification allowed to the TRAN 1.
Because of the illegal credit claims, the transitional credit claimed by the businesses were also inspected to make sure that they were genuine.
MS Mani, partner, at Deloitte India said “Transition credits have been challenging for all businesses and the IT grievance redressal committee should ideally be considering all issues for the entire period instead of a sunset period and clarify that all genuine errors, whether arising from the GSTN portal issues or committed by the taxpayers would be condoned unless there is mala fide intent”.
