Companies Received GST Notices On Claiming ITC After Due Dates

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 Get to know GST provisions and rules on the free supply of goods. Also, we have included rules regarding ITC reversal on free supplies of goods and services or both after the due date for furnishing of returns”,

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 These types of taxes paid on Consumption by the consumer but they do not pay directly to the government (unlike income tax). For example, GST, Sales Tax, VAT, Custom Duty and Octroi Tax and Customs have restricted around Rs. 40,000 crores of tax credits due to inaccurate information and mismatch in the returns. The probable cause of the mismatch or inaccurate information is because the suppliers who were involved in transactions with the companies claiming credit have not uploaded their invoices. To this the current norms allow a company to claim 10% of the missing invoices.