The GST department of the Haryana region has recently issued circular mentioning that all the field officers must hold and block the input tax credit pertaining to certain conditions.
Excise and taxation commissioner of Haryana circular asked to block the ITC citing the reason of non-utilization of input credit in course of business. While on the other hand tax experts believe that such decision hampers the government image as the ITC is a self-certified component under the GST and it must not be blocked.
The circular issued by the Excise and taxation commissioner of Haryana stated that the blockage is relevant to the fake and bogus taxpayers, excess transitional credit, non-functional firms and highly unlikely credit demand under the GST rules and regulations.
A tax expert said that “It appears that the circular is vulnerable to legal challenge on account of being arbitrary, as it gives unbridled powers to officers to deny or block credit, without giving any opportunity to the assessee of being heard.”
It all depends on the future possibilities of power which can be exercised to block its ITC. Also, it is to be noticed that whether the blockage would be sorted out at the later stage by any particular process.
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