Show Purchase ledgers for claiming GST credit of over Rs 25 lakh
Companies that availed of more than Rs 25 lakh credit under the goods and services tax (GST) regime in lieu of levies paid under the previous system will soon have to give details of their purchase ledgers for six months before the new tax regime was rolled out.
The government will soon bring out a new ‘credit growth return’ form.
This comes after a detailed analysis of the top 50,000 taxpayers showed a sharp rise in the closing balance of credit of many at the end of June last year compared with September 30, 2016. These top 50,000 taxpayers have claimed about Rs 1.5 lakh crore worth of credit.
Who needs to give Purchase ledgers ?
Companies that have shown more than a 25% jump in credit between October 2016 and June 2017 will also have to share these details.
This form will be restricted to central GST as states captured purchase details under the value added tax (VAT) regime.
Why Central GST department will demand Purchase Ledgers ?
There is a worry that companies may have claimed more credit than they were entitled to, leading to suppressed GST revenue
Under the transition rules, traders and retailers are allowed to claim a credit of 60% of taxes paid earlier against CGST or SGST dues where the tax rate exceeded 18%. In cases where the GST rate was below 18%, only 40% deemed credit was allowed against CGST and SGST dues.