The government has moved the Supreme Court (SC) against a Delhi High Court order allowing Bharti Airtel to claim Rs 9.23 billion in tax refunds by rectifying its goods and services tax (GST) returns filed earlier.
The petition has been filed against four respondents – Bharti Airtel, the GST Council through its secretary, commissioner through the finance ministry’s department of revenue commissioner and the Central Board of Indirect Taxes and Customs (CBIC) via its chairman.
The government’s plea was filed by advocate B Krishna Prasad, and a caveat has been filed by respondent advocate Rahul Jain. A caveat will prevent the court from taking any action without informing the opposite party, the respondents in this case.
Earlier, on May 5, 2020, a two-judge bench of the Delhi High Court had allowed Airtel to seek GST refunds for the period July-September 2017. The High Court had directed the government to verify the excess GST claim within two weeks of the order and refund the amount to Bharti Airtel.
While government authorities claimed that Airtel had under-reported input tax credit from July to September 2017, the operator stated that it had paid excess tax of Rs 9.23 billion on inputs based on estimates since the GSTR-2A form was not operational during the error period.
The company had excess input tax credit at its disposal but could not adjust it against the final tax liability due to regulatory and technology-related uncertainties at the time of transition to the new indirect tax regime in July 2017.
Later, when the telco noticed availability of excess input tax credit, restrictions on rectifying past tax return filings prevented it from claiming that benefit. The High Court order had permitted the company to rectify Form GSTR-3B for the error period.