The tax department is high on toes since the false credit claims are surging from past few months. In this direction, the tax department has now decided to tug all those 50 thousand taxpayers who are on the higher side of claiming input tax credit. These taxpayers are on the upper side of credit claim and also the range starts from INR 25 lakh of credit claim.
Business units registered during the period of October 2016- June 2017 i.e. before the implementation of GST including single-owned firms, LLPs and Hindu Undivided Families (HUF) will be under the scanner of CBEC. Business firms those claimed Input Tax Credit (ITC) prior to the GST implementation will be scrutinized by the Central Board of Excise and Customs (CBEC) and in the case found guilty, legal actions will be against them.
The whole data of input tax credit claim prior to the GST implementation has been assigned by CBEC to their field officials which will further investigate the matter according to their research techniques.
The tax department is seeking to verify the credit claim in four phases as decided by the authority and would purely focus on the verification part of claims in the upcoming year.
Also Read: Two Businessman Arrested For Availing Fraud GST Input Credit
The transition into GST had given the chance to the taxpayers to file the credit claim under the TRAN 1 form in which they were allowed to take the credit for the previous tax paid.
According to the first phase, the tax department will clarify and properly claim the transitional credit claims where the 25 percent of the credit availed is more than 25 lakhs. The report of clarification will be submitted to the CBEC.
The move comes after so many cases of the false credit claims taken by the taxpayers with illegal means. The tax department was earlier taken the backlash of such misrepresentation of credit claims thus forcing the department to take strict actions.