Tran-1 Credit Rejection

[AVS AVS]

Have one query-

ITC claimed through Tran-1 was rejected by stating that amount of refund in Original MVAT return was NIL.

We were advised to approach nodal authority and apply for refund under MVAT Act,2002.

However even the nodal authority has not selected our case for refund

What should be the way forward?

[KASTURI SETHI]

Dear Querist,

Pl. refer to the following : -

"ITC claimed through Tran-1 was rejected by stating that amount of refund in Original MVAT return was NIL."

Pl. elaborate your query overall. Also clarify how it was shown as NIL in original MVAT return?  Full facts & circumstances are required.

[AVS AVS]

We had earlier filed original MVAT return showing amount of refund claimed/credit carried forward as NIL. However later on we had filed revised return showing an amount of refund which was equal to the claim made through Tran-1. The department through a circular has stated that Tran-01 claim cannot be more than amount mentioned in the original return and for the amount mentioned in revised return refund application should be filed with the nodal authority under the MVAT law. However, transition rules under the CGST Act/ State GST Act don't impose any such restriction.

[Shilpi Jain]

Explore if you would wish to file a Writ in HC. However, do consider the amount of credit involved also.

AI Summary

Tran-1 input tax credit restriction challenged where original MVAT return was nil; consider nodal refund application or writ challenge. Tran-1 ITC claims were rejected because the original MVAT return showed nil refund while a later revised return showed the claimed credit; the department applies a circular limiting Tran-1 to amounts in the original return and directs refund claims for revised-return amounts to the MVAT nodal authority, whereas the taxpayer asserts that GST transition rules do not impose that restriction. The dispute requires factual verification, pursuing nodal refund procedures, and consideration of writ remedy depending on amounts and evidence.