prpri Justice delayed is Justice denied case of Trans-1 &MVAT revised return Justice delayed is Justice denied case of Trans-1 and MVAT revised return!!

Arjuna (Fictional Character): Krishna, Maharashtra state SGST department has corrected the mistake related to Trans 1 and MVAT revise return. Because of it taxpayers suffers from many problem related to it, tell us that how much it affects the taxpayers?

Krishna (Fictional Character): Arjuna, You’re right, if government makes a mistake in GST then they are likely to be rectified, but if a taxpayer makes a mistake, there is weird law of imposing fine on them. When GST act was implemented from 1st July, 2017 the credit available in the MVAT regime was claimed by the taxpayers by filing the Form Trans 1 and it was related to MVAT returns. So, many taxpayers claimed VAT credits by filing revised returns and it was opposed by the department. Also, many taxpayers bearded to pay interest on it and they have to reverse the credit on the basis of notice issued by dept and on directions of by officers.

Arjuna: Krishna, on 19th October 2019 internal circular was issued by department about the above problem of original and revised return of MVAT?

Krishna: Arjuna, after two years department realized their mistake and they are triying to rectify it. Earlier there was a instruction in internal circular which allows MVAT credit up to only as much as there is in the original returns, because of it taxpayers suffer from harassment. For e.g. In original MVAT return refund was claim by taxpayers of credit of Rs.1,00,000 and after that they want to carry forward the credit in SGST Trans 1 instead of refund by filing revise return, credit was in SGST was not given. It is now directed to give credit in October 2019. Further many releated issues are resolved in above internal circular.

Arjuna: Krishna, Everyone wanted the GST to be a simple law, but it seems that government started with mistake by which taxpayers suffered a beating?

Krishna: Arjuna, Maharashtra SGST department issued the Internal Circular on 1st January, 2018 and on 1st September, 2018 which creates an unfair condition. As per circulars many taxpayers reverse the credit and paid interest. Now it is said that the credit may be allowed, to be claimed in Trans-1, as per the revised return. Also, in the Internal Circular published in October 2019, other questions have been answered positively. On such Internal Circulars, the taxpayer may file an appeal in the court, because of these Circulars as it has been found to be unfair with them.

Arjuna: Krishna, Such mistakes of Government are removed by issuing the circulars, but why do not have an opportunity to rectify the taxpayer’s mistakes?

Krishna: Arjuna, if there is a mistake in the GST returns then taxpayer should be given a chance to rectify the same by filing a revise return. Whether it is an original return or a revised return, law states that the revised return is an also a valid return so the taxpayer should get justice accordingly.

Arjuna: Krishna, what lesson the taxpayer should take from this?

Krishna: Arjuna, Even late but taxpayers who fights under the law gets justice or benefits. But taxpayers who feel that they do not want to be intimidated by the law or any authorities and they pay taxes and interest, but they later regret, which is totally wrong. The government should make and follow the same law for all people, Otherwise it has been seems an unfair situation that the person who pays tax will be beaten. It’s a case of Justice delayed is justice denied.

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Qualification: CA in Practice
Company: R.B. Sharma and Co
Location: Aurangabad, Maharashtra, India
Member Since: 27 Jan 2018 | Total Posts: 331
1. Vice-Chairmen of WIRC of ICAI for the year 2015-2021. 2. Youngest Chairman of Aurangabad Branch of WIRC of ICAI in 2002. 3. Author of Popular Tax articles series based on Krishna and Arjuna conversation i.e “KARNITI” published in Lokmat on every Monday. Till date 335+ weekly articles ha View Full Profile

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  1. Sumit Anshani says:

    Dear Sir,

    Thank you for the knowledgeable information. We have a query, in one of our case, the officer has rejected the Trans-1 Credit cause the same was taken based on revised MVAT return and now after this circular, they are telling us to file an appeal and pay the Deposit amount of 100% of Tax, interest and penalty. Is it mandatory to pay any amount as Deposit under MVAT Act for such kind of appeals?


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