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.

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.