As no verdict has come from the Central government regarding the payment of the accumulated Income Tax Credit amount to the Gujarat power loom weaving sector. As a result, the Federation of Gujarat Weavers Association (FOGWA) in a meeting on Monday has taken the decision and asked the power loom weaving sector, not to file the GST return with the central government.
The power loom industry leaders informed that the weavers are not ready to pass on the credit accumulation to the buyers and thus this is going to result in great loss to the industry as the weavers will not be able to modernize or expand their units.
If the Income-tax credit, lying unutilized with the manufacturer, is more than the amount accumulated due to the inverted duty structure during that period, then the ITC amounting to the inverted duty structure would lapse.
Ashok Jirawala, President of FOGWA, after the meeting, while talking to the media, said that there is no such provision under the GST law which directs and allows to block the accumulated Input Tax Credit.
Read Also: Input Tax Credit Guide Under GST: Calculation with Examples
Whereas the Central Government and the GST Council have blocked Rs 400 crore worth of accumulated ITC credit of the power loom sector effective July 31, 2017, to July 31, 2018. He gave the reference of the Textile processors who are benefited with the ITC credit for which the power loom weavers are also eligible.
