TRAN-1 Verification

[Murari Agrawal]

We were registered under C.E. & Service tax and submitted TRAN-1 for basic Duty balances of C.E & service tax (no PLA balance or Vat credit). In 2018 we got a mail from department seeking verification, relevant documents were submitted against receipt. Again in 2019 we got mail seeking copies of Invoices related to credit availed during past six months which were submitted against receipt. Now again another Inspector has called over phone seeking all documents along with stock statement and concerned invoices saying we are eligible for amount of duty involved in closing stock, which we think is not correct. Also our audit under EA-2000 has been completed till June, 2017 in May, 2019. Kindly advise.

AI Summary

Transitional Cenvat credit verification: department can demand records and recover wrongly claimed transitional credit after scrutiny.
Transitional transfer of pre-GST Cenvat credit via TRAN-1 is subject to departmental verification and must reconcile with the taxpayer's books; officers may request invoices, stock statements and reconciliations. If verification discloses wrongly claimed or ineligible credit, the department may issue show-cause notices and recover the amounts with interest and penalties under the GST transitional and recovery provisions. Claimants should maintain and produce stock and invoice evidence and explain TRAN-1 balances, while noting competing views on whether entitlement is limited to duty corresponding to physical closing stock.