- March 4, 2020
- Posted by: Siffat Kaur
- Category: GST
While the circular no. 26/26/2017-GST dated 29.12.2017 provided an option to make an amendment in the return subsequent to the period in which error was noticed, a recent judgment by Delhi High Court has opened a new door to this chapter.
In the case of “Bharti Airtel Limited v. Union of India’ it was held by the Hon’ble Delhi High Court that as per rule 61(5) of the CGST Rules, 2017, Form GSTR-3B is only a summary return that was introduced by the government as a temporary replacement to Form GSTR-2 and 3. The said form has no inbuilt checks and balances to ensure that data uploaded is accurate, verified and validated. The CGST Act initially contemplated a self-policing system under which the authenticity of the information submitted in the returns by the registered person was not only auto-populated but verified by the supplier and confirmed by the recipient in the same month. The Apex Court, in another judgement, had held that the delay in operationalizing of GSTR-2A, a process which was statutorily mandated, could not defeat the rights of the taxpayer to take and use credit in the month it was due. It further held that the department had failed to fully enforce the scheme of Act, and could not take benefit of its own wrong of suspension of statutory forms and deprive the rectification/ amendment of the returns to reflect ITC pertaining to a tax period to which the return relates to. It was also held that merely if there is a fanciful or absurd outcome in a given situation, it does not mean that the Petitioner should not be given the benefit of rectification if the same was genuine. The correction mechanism was critical to sustaining successful implementation of GST.
The judgement is a welcome decision as it offers significant relief in terms of the right to take and use credit in the month in which it was due. Businesses who have faced similar difficulties can evaluate the possibility of taking the benefit of the ruling. The Industry at large may analyze the impact of this ruling in various other scenarios basis the facts and period involved in each case. This decision would also be welcomed by the taxpayers who could not avail the due ITC or paid excess tax in the starting phase of GST implementation in India.
It may be noted that the Hon’ble High Court has not specified how this decision will be practically implemented. Thus, we may have to see whether rectification facility will be made available on the GST portal or rectification will be available through manual filings by the specific taxpayers.