About Rs 60,000 crore in claims under the input tax credit provision of the Goods and Services Tax (GST) scheme is under verification by the government, said a report in financial daily Business Standard (BS) on Monday.
The daily said that the input tax credit amounting to Rs 62,000 crore for the period before July 1 has been claimed through the TRAN 1 form. Companies had a 90-day period from July 1 to claim credit for the excise duty already paid on inputs.
About Rs 95,000 crore in revenue was collected in the month of July. But what has startled the government is the steep Rs 62,000 crore claimed during the transitional period to GST.
GST was imposed nationwide on July 1 this year. "We need to verify if the claims filed are genuine. The number appears to be quite huge with respect to the tax collected," a senior government official was quoted as saying in the BS report.
Revenue Secretary Hasmukh Adhia was quoted as saying that the government is still evaluating the number of input tax credit claims, which seems too large and does not add up.
About 70 per cent of the eligible registrants for July have so far filed returns under the new GST scheme, while Rs 95,000 crore has been collected in taxes.
The GST Council had allowed companies to claim 100 per cent input tax credit by uploading excise payment invoices for the period before July 1. In case of unavailability of invoices, the Council had allowed 40 per cent input tax credit, the report said.
The Input Credit Mechanism is available to manufacturers, supplier, agents, e-commerce operators and aggregators covered under the GST Act to claim input credit or reimbursements on tax paid by them while purchasing inputs like raw materials, hardware or software required to create a finished product or offer a service.
At the June 4 meeting of the GST Council, the limit on input tax credit was raised to 60 per cent from 40 per cent of GST liability on items with a tax rate above 18 per cent. Besides, the entire 100 per cent input tax credit are permitted to be claimed on high-value items of above Rs 25,000 with a chassis number.