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The indirect tax department has issued notices to thousands of companies that had claimed input tax credit under the goods and services tax framework after missing the deadline to do so, and asked them to reverse the transaction.
These companies had claimed the input tax credit for fiscal 2018 and 2019 after missing the September deadline. The tax department has asked them to reverse the transactions and pay interest on the wrongly claimed credit, people in the know said.
Input tax credit is a mechanism whereby companies can set off GST paid on raw materials or input services against future tax liabilities.
“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 input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date for furnishing of returns,” a tax notice seen by ET reads. #casansaar (Source - Economic Times)
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