The Delhi High Court on Wednesday asked the ruling government to verify Bharti Airtel’s claim of overpaying GST of Rs 923 crore between July and September 2017 within two weeks and refund the amount once verified.
“This was occasioned to a great degree due to non-operationalization of Forms GSTR-2A, GSTR-2 and GSTR-3 and the system-related checks which could have forewarned the petitioner about the mistake. Petitioner now desires to correct its returns, but is being prevented from doing so, as there is no enabling statutory procedure implemented by the Government,” said the judgement copy.
“We also direct the Respondents that on filing of the rectified Form GSTR-3B, they shall, within a period of two weeks, verify the claim made therein and give effect to the same once verified,” the High Court said.
Before proceeding to the High Court Bharti Airtel tried to correct the irregularities by acting on government’s September 2017 circular, which allowed for reconciliation of any mismatch. But as per another circular issued on December 2017, companies were not allowed to make any changes under the previous circular i.e. September 2017.
With all these restrictions and complex circulars, Bharti Airtel was forced to move the High Court, challenging the December 2017 circular.
Rajat Mohan, Senior Partner at AMRG & ASSOCIATES said that the Delhi High Court has permitted the petitioner to avail additional tax credit by allowing rectification of Form GSTR-3B for the period to which the error relates, July to September, 2017.
“The petitioner alleged that there is an additional payment of taxes to the tune of Rs 923 crores and such additional credit is expected to adversely impact the tax collections for the current month. This ruling would help give respite to many taxpayers who are unable to file for rectification of previously filed tax returns,” he said.
The court order said that the refund of excess cash balance in terms of Section 49 (6) read with Section 54 of the CGST Act does not effectively redress the petitioners’ grievance. Therefore, the only remedy that can enable the petitioner to enjoy the benefit of the seamless utilization of the input tax credit is by way of rectification of its annual return, GSTR-3B, it added.
On the back of the judgement, the company’s shares surged on Wednesday before closing at Rs 546, higher by Rs 17.95 or 3.40 per cent from the previous close.