In case of manufacturers, stockists, retailers and shopkeepers had claimed input tax credit under the goods and services tax in Kerala, they will have to return it along with penalties as a notification by the deputy commissioner, state GST department, Mattancherry asked it.
The deputy commissioner has asked the tax officers to stop allowing any of the input tax credit on the good destroyed in the Kerala floods. All the businessman who has claimed the input tax credit earlier on the good and which were destroyed in the floods will have to return the credit to the department.
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While the condition for claiming input tax credit is that the goods must be sold out and the applicable taxes are collected, but the obvious fact here is that the goods on which the ITC has been claimed are either lost or destroyed in Kerala floods.
According to the directive issued, “input tax credit shall not be available in respect of good lost, stolen, destroyed written off or disposed of by way of gift or free samples.”
According to the officials, the government may collect extra penalties from the stockists, retailers and shopkeepers in the vision of huge damages done by the floods in Kerala.
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The notification has made the more difficult situation for the businessman as they were already reeling under losses by the floods and now they have to pay input tax credit along with penalties which makes it more pressurizing.
