Verification of pre-GST transitional credits by February 28, 2023

In NITYA Outlook | Issue 105 | CBIC issues guidelines on re-opening of GST Portal to file / revise claims of transitional credits and NITYA | Indirect Tax Bulletin | November 2022 | Week 1 – 3, we apprised you regarding CBIC Circular No. 180/12/2022-GST dated September 9, 2022 on re-opening of GST Portal to file / revise claims of transitional credit between October 2022 to November 2022. The revenue is required to verify such claims of transitional credit by February 28, 2023.

In this regard, CBIC vide Circular No. 182/14/2022-GST dated November 10, 2022 laid down following guidelines for verification of transitional credit:

• Principles of Natural Justice needs to be followed before passing Order allowing / disallowing transitional credit.
• The revenue needs to issue notice seeking explanation as to why transitional credit should not be denied and needs to mandatorily grant an opportunity of personal hearing.
• The revenue needs to pass reasoned Order considering facts and submissions, within fifteen days from the date of personal hearing.

As February 28, 2023 is fast approaching, revenue has started issuing notices giving few days to file reply and thereafter passing adverse Orders.?

NITYA Comments: At ground level, the revenue is issuing notices to taxpayers (who filed claims in aforesaid window) proposing to deny transitional credit considering limited window for closure of such proceedings. Taxpayers are advised to promptly respond to such notices and participate in the proceedings.

In many cases, the revenue is also passing Orders denying transition of credit. Such orders are appealable before the Appellate Authority under Section 107 of the CGST Act. The time-limit for filing appeal in such cases is three months from date of service of the Order.

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