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Companies fear losing credit over GST filing errors

A company with Rs 100-crore credit in lieu of taxes paid in the past regime, risks losing it now under the goods and services tax (GST) reign simply because of the 'fat finger,' as it is popularly called. With the August 28 (Monday) deadline looming for filing returns and ensuring GST compliance, corporates are a deeply concerned lot.

The offline utility for GST TRAN 1 form — to be used to claim input tax credit for the pre-GST regime — was not available till Sunday, leaving just a day for filing returns and causing a weekend rush. In absence of the utility, details had to be filed online with higher chances of error.

Tax practioners struggled to meet the deadline, having had to deploy additional manpower to manually key in invoices, some running into thousands. What has compounded the industry's worry is that there is no clarity on whether TRAN 1 can be revised later for any inadvertent human error (or fat finger) due to manual entry or will it simply mean losing tax credit.

This has led to a clamour for another extension of the deadline or a provision allowing amending of the form later. The government had already extended the deadline once for those seeking to claim transitional credit from the past regime from August 20 to August 28, following industry representations.

An offline utility allows entry of details, careful scrutiny and subsequent submission, reducing chances of errors while online filing may lead to fat finger errors. One company ET is aware of has already made errors in filing online and is worried about losing its accumulated input credit.

Taxpayers are required to provide all details separately — invoice-wise or challan-wise. These can pertain to claim of Cenvat or value added tax credit on capital goods, details of stocks at job workers’ premises, concessional rate of central sales tax claimed under the previous regime and claims where invoices were not received till June 30.

In some companies, these details would run into thousands of lines of items, where each line would need to be punched manually in the specified field in the online forms. Further, TRAN 1 (and consequently, all such details) is to be submitted for each jurisdiction where the entity has registration. Absence of the offline utility thus becomes a significant issue.

The GSTN, an official said, is working overtime to ensure that all IT requirements with regard to compliance are met. The industry, however, has already demanded a tech audit of the GST Network. The Confederation of All India Traders last week asked the government to order a tech audit of GSTN in the wake of filing issues. Another official said the government is keeping a close watch on the situation.

'POSTPONE COMPLIANCE' Tax experts are pitching for pushing forward the compliance calendar. "Problems in filing TRAN 1 returns due to absence of (offline) utility is compounded by inadvertent errors made in filing, with no recourse or visibility of a change in the returns...

The compliance calendar should be pushed forward to allow GSTN to be fully ready with its software," said Bipin Sapra, partner, EY. "Without any utility on GSTN for filing TRAN 1, companies have to manually punch thousands of invoice and other details on the portal. It is both time-consuming and error-prone. Also, there is confusion as to whether TRAN 1 can be revised later (or not)," said Pratik Jain, indirect tax leader, PricewaterhouseCoopers.

Jain said the industry would hope for an extension of the timeline for filing TRAN 1 once the utility is in place and an immediate clarification that it can be revised at least till September 30. MS Mani, senior director, Deloitte Haskins & Sells LLP, pointed out that service providers are equally hit. "Several businesses that had filed their service tax returns by August 15 and thereafter realised they are required to revise the service tax returns are now in a quandary."

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