For such companies that are demanding the Input Tax Credit even after the due date is over are receiving notices from the tax department saying that they (companies) need to reverse their transactions. ITC is the credit claimed by the companies in lieu of the GST paid on raw materials or input services. The credit is either adjusted against the future tax liabilities or is credited to the taxpayer.
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The ITC claimed by the companies under Goods and Service Tax (GST) Regime is for the transactions in Financial Year 2018-19, the deadline for which was September.
The indirect tax department sent the notices commanding the companies to reverse the transactions and pay interest on wrongly claimed ITC. The companies are eligible for challenging the notices in the court.
The content of the notices said, “It is noticed that you have filed returns after the due date specified for availing (of) input tax credit for discharging your tax liability. You shall not be entitled to take the input tax credit in respect of any invoice or debit note for the supply of goods or services
There cannot be the fixed deadlines for availing the credit on transactions as it is valid only after the supply or the payment of the supply is done. This statement is enough to challenge the notices by the tax department.
Till now the Central Board of Indirect Taxes