Till September, businesses had claimed credit of over Rs
65,000 crore for excise, service tax or VAT paid before
the GST was rolled out from July 1, following which the
tax administration had initiated audit and enforcement
action against the high-value claims.
Officials said the number of transitional credit claims
were later revised upwards to about Rs 1.4 lakh crore,
out of which only 10 per cent have been found to be
ineligible.
Tax experts questioned the denial of disputed CENVAT
credit against GST liability, saying that it could
invite litigation. EY in a note said, “The circular,
denying the benefit of utilisation of disputed CENVAT
credit against the GST liability, seems to be in
supersession of the position under the law and hence it
could invite litigation. Till recently, the GSTN portal
did not give the option to the taxpayer to retain part
of the credit without utilising it fully while computing
GST liability exceeding such credit. This could result
in the recovery of credit with interest and penalty
getting triggered in all such cases where a taxpayer had
utilised the credit, as the tax authorities will be
bound to follow the circular.
Directions to submit an “undertaking” for
non-utilisation of disputed or blocked credits is
unwarranted and requires reconsideration as it would add
to the compliance burden of the taxpayer.”
Source::: The Indian Express,
dated 02/03/2018.