NEW DELHI: The government has moved the Supreme Court (SC) against the Delhi High Court order allowing Bharti Airtel Ltd to claim ₹9.23 billion in tax refunds by rectifying its goods and services tax (GST) returns filed earlier.
A two-judge bench of the high court, on 5 May, had allowed the Sunil Mittal-led telecom major to seek GST refunds for the period of 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 authorities claimed Bharti Airtel had under-reported input tax credit from July to September 2017, the telco said it had paid excess tax of ₹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 India’s transition to the new indirect tax regime in July 2017.
Later when the company noticed availability of excess input tax credit, restrictions on rectifying past tax return filings prevented the telco from claiming that benefit.
The high court order permitted the company to rectify Form GSTR-3B for the error period. “We also direct the respondents (the central government) that on filing of the rectified Form GSTR-3B they shall, within two weeks, verify the claim made and give effect to it once verified," the May order had said.
The case titled ‘Union of India through its secretary versus Bharti Airtel Ltd’ has been shown in the ‘defect list’ by the apex court registry. A 'defect' status means that a petition filed has errors, which need to be rectified for a case to be listed in the court.
The petition had 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.
Bharti Airtel is stuck in another legal battle of adjusted gross revenue (AGR) with the department of telecommunications (DoT) and a ruling against the telco in the GST refund case could deal a further blow on its already-stressed finances.
While the telecom department had estimated Airtel’s dues around ₹37,000 crore, the telco, after a self-assessment, said it owed ₹13,000 crore to the government. Along with this amount, Airtel deposited an additional ₹5,000 crore as an ad-hoc payment to cover differences, if any, arising from the reconciliation exercise with the DoT.