The businesses that were urged to furnish more indirect taxes upon specific import come beneath the taxman’s lens to take the ITC upon some more amount furnished before as penalties. The Department of Goods and Services Tax (DGST) was initiated to provide the notices to the importers to take of the tax credit with respect to GST furnished additionally.
As per the people who are aware of the concern, the present law permits the importers to find out the valuation of their importers and furnish the GST along with the additional duties upon the same. In the majority of the cases, the importers furnish the valuation information via bill of entry, a legal credential that is furnished upon the arrival of the imported goods.
In the last 2 months, the tax council has started examining the bill of entry and found that the difference within the valuation of several imports. Importers were urged to furnish some more tax towards the goods imported in 2018/19 as a penalty. The issue is whether the importers can claim the ITC on the additional taxes furnished for the former years. Beneath the GST platform, the ITC is importantly taxes furnished upon the raw materials or the input services. It can be practised to diminish future GST liability.
For example, an organization has imported goods worth Rs 100 and furnished Rs 18 under the mentioned tax. The tax council’s investigation revealed that the goods must pose a value of Rs 150 and more taxes of up to Rs 9 must be furnished.
The business must claim the ITC for Rs 18 furnished in taxes in the 1st EMI. However, various firms have added Rs 9 for ITC and the tax council has provided the notices towards the mentioned cases. The people who were concerned about the subject specified that in the last few weeks various notices had been issued to various importers.
Under the show-cause notice from the DGST towards the importer, ET reveals that the council has mentioned that the firm was not subjected to avail the ITC towards the additional tax furnished upon the import or to the supply of goods under GST. The tax experts stated that under the GST platform there is a span to claim the ITC that causes the hurdles.
When the firms are not able to avail the same in the subsequent months they shall not be furnished with the credit. This can affect their working capital along that specific of them may seem harder towards it said the experts.
“The credit restriction does not apply to credit availed on imported goods in case of reassessment of the bill of entry which is a statutorily recognised taxpayer document for availing credit. The condition qua time limit is applicable only in respect of invoice or debit note. As a corollary, there cannot be any denial to either credit or refund, the tax expert mentioned.” “Writ petition can be one of the most effective legal remedies in such cases of unfair denial, mentioned by the assessee.”
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