The Orissa high court has notified that deposits needed to be proffered for appealing in a debate under the goods and services tax (GST) has to be refunded via cash ledger only. Professionals say that this could influence that business that has massive input tax credit sprawling unused.
The order was notified in a case where the petitioner stated that he had to refund those deposits, known pre-deposits in technical cliché, via electronic credit entries and even after the additional commissioner of sales tax (appeal) dismiss his request.
The court said it is impossible to find any mistake having been committed by the supreme authority in refusing the petitioner’s dispute that the electronic credit ledger could be debited for the intention of making the payment of pre-deposit.
Rajat Mohan, senior partner AMRG & Associates, told the ruling will have a negative influence on businesses having a vast chunk of assembled tax credit like start-ups and the organizations under the textile sector.
He stated in business language authorities will not differentiate between the maintain lying in electronic cash and credit ledger as both of them are meant to be employed for payments of output taxes.
In the GST laws, an accuser has to pay ten per cent of the amount of tax in dispute as a pre-deposit. Whereas for the next appeal, an extra 20 per cent has to be paid.
