Supreme Court Sets Aside Bharti Airtel's Rs 932-Crore GST Rectification Claim
The top court allowed the appeal by central government which challenged the high court order allowing the rectification.
The Supreme Court of India on Thursday set aside a Delhi High Court order that allowed Bharti Airtel Ltd. to rectify the input tax credit claim of excess goods and services tax paid of around Rs 932 crore.
In May last year, the high court had allowed the mobile operator to rectify GST returns filed between July and September 2017 after the company said it paid excess tax on inputs in absence of a purchase-related tax return form.
The Sunil Mittal-controlled carrier said it paid an excess tax of Rs 923 crore as the details of the input tax credit—the tax paid on inputs that can be adjusted against future tax liabilities—during the period was offered based on estimates on account of non-operationalisation of the GSTR-2A form by the government. So, it underreported its claim for credit.
The government argued that under GST law, the right to claim input tax credit is governed by certain terms and conditions. It requires a party to maintain records of transactions and the authorities have no role to play in that regard, argued the government.
The original scheme of the Central GST Act provided for forms GSTR-1 - details of outward supplies; GSTR-2—inward supplies data or purchases made; and GSTR-3 which electronically collated these details and the tax liability.
While GSTR 2 and 3 were not operationalised, GSTR 2A was introduced in October 2018 for availing input tax credit and GSTR 3B to file summary returns of the monthly tax.
Prior to GSTR-2A being introduced, for July-September 2017, Bharti Airtel submitted the input tax credit details based on estimates. In October 2018, the telecom service provider said, it noticed the underreporting and sought to file rectified returns.
The top court, however, said the high court didn't determine the cardinal question whether Bharti Airtel was fully or wholly dependent on the auto- generated information in the electronic common platform for the relevant period.
The answer is an emphatic no, the Supreme Court said.
Even in the past (till recently up to the 2017 Act came into force), during the pre-GST regime, the writ petitioner (Airtel) had been maintaining such books of accounts and records and submitting returns on its own. No such auto-populated electronic data was in vogue. It is the same pattern which had to be followed by the registered person in the post-GST regime.Supreme Court of India
The Supreme Court, however, said that the law allows for the excess input tax credit to be availed at a later stage.
It must follow that Bharti Airtel, with full knowledge and information derived from its books of accounts and records, had done self assessment and assessed the output tax liability for the relevant period and chose to discharge the same by paying cash, the court said.
Having so opted, it is not open to Bharti Airtel to now resile from the legal option already exercised, the apex court concluded.
Bharti Airtel said in a statement the Supreme Court order has maintained that the "company has the freedom to avail the amount of Rs 923 crore as input tax credit in the subsequent returns, which the company had duly done".
(Corrects an earlier version that misstated that the Supreme Court set aside GST refund claim)