GST notices worth several crores continue to bombard the industry leaving India Inc in a tizzy as corporates have claimed credits while filing returns, which according to GST authorities have been blocked and thus cannot be claimed.
According to sources, “the GST authorities are issuing notices in large numbers to companies so as to ensure that the notices are issued in a time bound manner.”
However, the fear of the industry is that the first adjudicating authority will confirm the demand and hence there will be an additional burden of litigation cost and pre-deposit amount for filing an appeal.
The matter of blocked credit has been a major issue, the apex court has been hearing the industry’s plea on the matter and recently has concluded the hearing on the crucial section 17 of CGST Act.
Supreme Court, yesterday has however, reserved orders with the direction to the petitioners – industry — to file the written submission so that the matter could be comprehensively addressed.
In this matter, the plea was filed by several industry players having commercial complexes, malls, warehouses, factories, pharmaceutical companies and several other diverse sectors, who had raised the matter before several High Courts and then later it was taken up at the Supreme Court with respect to the statutory provision of blocking credits under the GST regime.
The credits are disallowed for works contract services, other services and goods which are used for construction of an immovable property.
“Revenue is of the view that the construction of an immovable property results in an asset which is not subject to GST and hence the credit must be denied. The industry is of the view that the credit cannot be denied , as the ultimate objective is not to create an immovable property but to render taxable services such as leasing services which are taxable, sources in the know of the development on the condition of anonymity added.
Source: CNBC TV 18
https://www.cnbctv18.com/business/india-inc-faces-gst-demand-notices-for-claiming-blocked-credits-18048441.htm
https://www.cnbctv18.com/business/india-inc-faces-gst-demand-notices-for-claiming-blocked-credits-18048441.htm
