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 top court has been considering the industry’s case over blocked credit, which has been a significant concern. The hearing on section 17 of the CGST Act, which is vital, was just ended.
Read more :ITC Mismatch between GSTR-2B vs GSTR-3B: New Rule 88D everything you need to know
Supreme Court, has however, reserved orders with the direction to the petitioners – industry — to file the written submission so that the matter could be comprehensively addressed.
Regarding the statutory provision of blocking credits under the GST regime, a number of industry players with commercial complexes, malls, warehouses, factories, pharmaceutical companies, and several other diverse sectors filed the plea in this case. They brought the matter before several High Courts before it was eventually taken up at the Supreme Court.
According to Revenue, building an immovable property creates an asset that is exempt from GST, hence the credit application needs to be rejected. According to people aware of the situation who requested anonymity, the sector believes the credit cannot be refused because the ultimate goal is to provide taxable services, such as leasing, which are taxable, rather than to produce immovable property
Experts argued for a dozen of tax payers that blocking of credit will defeat the fundamental objectives of GST framework and will lead to tax cascading. Rastogi had argued that “the objective of GST is seamless flow of credits and any blocking will ultimately defeat the basic objective. The procurement of goods and services, even if these are used in construction of a property, are ultimately used for rendering of taxable services/supplies.”
Read more:DRC-03 GST Form : Steps for filing DRC 03 and common Mistakes to avoid.
The non-obstinate clause that is being used to prevent the credit cannot violate the legal framework. Therefore, it is necessary to interpret the requirements so that the credit is only restricted for personal use or consumption and not barred when the transactions are for business-to-business transactions.
Disclaimer: The article or blog or post (by whatever name) in this website is based on the writer’s personal views and interpretation of Act. The writer does not accept any liabilities for any loss or damage of any kind arising out of information and for any actions taken in reliance thereon.
Also, www.babatax.com and its members do not accept any liability, obligation or responsibility for author’s article and understanding of user.
For Collaborating with us-
- Mail us at [email protected]
- Whatsapp us at +91-7024984925
