New Delhi : The government is likely to retrospectively amend laws governing the Goods and Services Tax (GST) to deny transitional credit to taxpayers against Cesses levied in the earlier indirect tax regime.
The proposed amendment to the GST law seeks to explicitly exclude cesses levied in a pre-GST regime from allowable transitional credit that can be claimed by companies. Under the transitional credit provision, companies were allowed to claim tax credit against levies such as value added tax and service tax on stock purchased before implementation of GST for a limited period.
However, the central government doesn’t want to give credit against the cesses. Media could not ascertain the exact amount of transitional credit claimed against cesses.
Companies had claimed nearly ₹ 65,000 crore in transitional credit by mid-September, prompting the Central Board of Indirect Taxes and Customs (CBIC) to review the claims. CBIC asked taxpayers to file revised claim forms by 27 December or face action for what they believe are exaggerated claims. It has started the process of phase-wise examination of some of the highest transitional credit claims.