The indirect tax department has released notices to various companies that have made late input tax credit (ITC) claims, thereby asking those companies to reverse the transactions accordingly. The concerned companies who had missed the September deadline and claimed ITC for fiscal 2018/2019 have received the notices.
“It is noted that you have filed returns for the discharge of your tax liability after the specified due date for availing (of) ITC. You are not entitled to take the input tax credit in respect to any invoice or debit note for the delivery of goods or services or both after the due date for the provision of returns”, reads a tax notice which was received by one of the companies.
Along with reversing the transactions, the companies have also been asked to pay interest on the credit that was wrongly claimed. The ITC is a mechanism via which firms can offset GST paid against future tax liabilities on input services or raw materials. The notices received by the companies could be challenged in court.
Various companies based in New Delhi, Maharashtra, Tamil Nadu, and West Bengal have received such notices. These firms can either choose to pay the amount or can challenge the demand in court. The CBIC has so far barred around Rs 40,000 crore worth of tax credits due to inconsistencies in return filings.
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Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.