TRAN credit verification

[V Rajalakshmi]

The company had availed TRAN credit on account of VAT paid material received after appointed date and declared the details in TRAN 1 return .The company has been served with notice saying that the part of the credit is in -eligible due the supplier has not remitted the tax. The company is in possession of original invoice and proof of payment made to the supplier . Any relief is possible or the tax needs to be compulsorily to be paid?

[Ganeshan Kalyani]

The credit is allowed provided the tax invoice is in the possession of the taxpayer.

[KASTURI SETHI]

Must fight the case on merits. I also agree with Sh.Ganeshan Kalyani Ji.

[Amit Agrawal]

Section 140 (5) reads as follows:

"A registered person shall be entitled to take, in his electronic credit ledger, credit of eligible duties and taxes in respect of inputs or input services received on or after the appointed day but the duty or tax in respect of which has been paid by the supplier under the 10[existing law, within such time and in such manner as may be prescribed], subject to the condition that the invoice or any other duty or tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day:

Provided that the period of thirty days may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding thirty days:

Provided further that said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this sub-section"

[V Rajalakshmi]

thank you sir

AI Summary

TRAN credit entitlement hinges on possession of tax invoices and supplier payment of tax, subject to prescribed procedural conditions.
Company sought TRAN credit for VAT-paid inputs; tax department challenged part of the credit alleging supplier non-remittance despite the recipient holding original invoices and proof of payment. Section 140(5) allows transitional credit where the supplier paid tax under the existing law within the prescribed time, the invoice was recorded in the recipient's books within the stipulated period (subject to possible Commissioner extension), and the required statement for taken credit was furnished.