ITC against TRAN I

[MANASH MUKHERJEE]

Dear Sir,

A taxpayer availed ITC againt TRAN 1 under para 5(a) . But actually the credit should have been on 6(a) , i.e. capital goods. How the things can be corrected or is the credit to be reversed by the taxpayer only on the ground that he wrongly filed TRAN 1 .

With regards,

M.Mukherjee.

[KASTURI SETHI]

Credit has to reversed along with interest and penalty in order to avoid SCN. Section 122 CGST ACT,2017 refers.

[Alkesh Jani]

Sir,

Please submit your error in writing to your jurisdictional office and make suitable entry in your book of Accounts. Preserve the acknowledgement for future use.

Our experts may correct me if mistaken.

Thanks

[KASTURI SETHI]

Dear Quetist,. You have claimed ITC TRANS-1 wrongly which stands uploaded in the portal. Now jurisdictional officer has no power to rectify your mistake in common portal. Law will take its course until and unless Govt. exonerates such bonafide error by way of modification in common portal which is a remote possibility. Since mistake is bonafide, you may get relief in the adjudication proceedings. I think so.

AI Summary

Input tax credit correction: misclassification on TRAN 1 requires written notice, accounting entry and possible reversal with interest.
A taxpayer claimed input tax credit under TRAN 1 para 5(a) though it related to capital goods under para 6(a); the portal upload cannot be rectified by the officer. Taxpayer should submit the error in writing to the jurisdictional office, make an accounting entry and preserve acknowledgement. Failure to correct may require reversal of credit with interest and penalty under Section 122 CGST, with any consideration of bonafide error to arise in adjudication.