North Block is in fresh discussions to ease taxpayers’ hardships, especially taking cognizance of the fresh tussle between Goods and Services Tax (GST) authorities and taxpayers, on the release of blocked input tax credit claims, senior government sources told CNBC-TV18.
The authorities had blocked these credits primarily due to issues like buyer-seller mismatch and non-filing of GST returns, a move which was initiated to curb tax leakages, encourage taxpayers to file timely returns, and to ensure that no undue credit is claimed. However, this initiative has now landed in trouble.
“Taxpayers have now filed writ petitions in various High Courts including Allahabad HC, Gujarat HC and Delhi HC, etc, seeking early release of blocked input tax credit, wherever it is due. In some cases, the credit has been blocked for a buyer who is not at fault, but it is rather his supplier who has not billed the supplies properly or has not filed returns to avoid taxes. In such cases, the genuine buyer faces working capital shortages as well as dual GST outgo, one paid to the supplier and the other by being unable to discharge his GST dues using input tax credit. Many such cases are getting reported,” sources told CNBC-TV18.
According to GSTN data, input tax credit of approximately Rs 14,000 crore involving 66,000 taxpayers has been blocked as on October 12, 2021. Sources further said that the finance ministry has taken cognizance of these writ petitions, post which the Central Board of Indirect Taxes and Customs (CBIC) is holding departmental discussions to assess whether the issue can be resolved by just issuing a fresh clarity on the ITC claim rules or it needs a fresh discussion.
“Given that the amount is huge, a clarity on rules might not be enough, and it is expected that the upcoming GST Council could consider the proposal to ease industry hardships on ITC credit blockage,” sources added.
Source from: https://www.cnbctv18.com/economy/taxpayers-go-to-court-demanding-release-of-input-tax-credit-11482472.htm