The Comptroller & Auditor General (CAG) in its report for the year 2020-21 tabled in the state assembly during the current budget session pointed out that none of the 2,357 samples of transitional credit under GST which the CAG saw had been verified by the state commercial tax department even after a lapse of more than 3 years from availing transitional credit by taxpayers.

The report said that the subject specific compliance audit of the commercial tax department was conducted regarding carry forward of the input tax credit (ITC) earned under the existing laws to the GST regime. Scrutiny of 2,357 sampled claims in 45 circle offices, showed 314 instances of non-compliance having an overall revenue impact of Rs 86.93 crore.

It further said “All of the 2375 selected cases of transitional credit under the jurisdiction of 45 circle offices were not verified by the department even after a lapse of more than 3 years from availing transitional credit by taxpayers”.

The report said that in 136 cases of transitional credit in 40 circle offices, the taxpayers had claimed transitional credit of Rs 77.02 crore against eligible VAT credit of Rs 5.75 crore which was shown as carried forward in VAT return of first quarter of 2017-18. Thus, the taxpayers had claimed transitional credit amounting to Rs 71.21 crore in excess of balance credit of VAT return.

In 22 circle offices, 41 taxpayers had brought forward the credit amounting to Rs 19.05 crore in VAT return of first quarter (April to June of 2017-18 against the balance credit of Rs 10.49 crore which was shown as carried forward in VAT return of 4th quarter (January to March) of 2016-17. Thus, the taxpayers had claimed excess credit of ITR amounting to Rs 8.56 crore in VAT return of first quarters (April to June of 2017-18).

In 68 cases of 25 circle offices, taxpayers had not filed the quarterly returns of VAT for the last six months (either fourth quarter of 2016-17 or first quarter of 2017-18 or both). However, the taxpayers “irregularly” claimed transitional credit amounting to Rs 3.97 crore, said the report.

Source: The Times of India 
https://timesofindia.indiatimes.com/city/bhopal/none-of-2357-samples-of-gst-transitional-credit-verified/articleshow/98720416.cms?from=mdr