The department has started issuing notices to companies that had claimed input tax credit (ITC) under the goods and services tax (GST) framework. These companies include those who has missed the deadline. Department has asked taxpayers to reverse the transaction. Apparently, these companies had claimed the input tax credit for 2018 and 2019 after missing the respective September deadline. The tax department has asked taxpayer to reverse the transactions and pay interest on the wrongly claimed credit.
In these notice , it is mentioned that taxpayer 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. Few experts has opinion that these notices could be challenged in the court. Few companies based in Maharashtra, New Delhi, West Bengal and Tamil Nadu were served with such notices. These companies can either pay up the amount or challenge the demand in courts. The Central Board of Indirect Taxes and Customs has already blocked ₹40,000 crore of tax credits due to mismatch in return filings.