Delhi HC lets Bharti Airtel claim GST refund of ₹923 crore

The Delhi high court on Tuesday allowed Bharti Airtel Ltd to claim goods and services tax (GST) refund of ₹923 crore by rectifying its returns for the September quarter of 2017.

The court’s decision comes at a time the telecom sector is passing through a troubled phase with cutthroat tariffs and intense competition, though things have eased a bit with covid-19-induced work from home causing a spurt in data consumption across India.

The company had excess input tax credits but could not use them to adjust its final tax liability because of regulatory and technology-related uncertainties at the time of India’s transition to the new indirect tax regime in 2017. Curbs on adjusting past tax return filings after excess input tax credits were noticed prevented Bharti Airtel from claiming the benefit so far.

“We permit the petitioner to rectify Form GSTR-3B for the period to which the error relates, the relevant period from July 2017 to September 2017,” the court said in its order, which was made available on its website late Tuesday.

“We also direct the respondents (the Union 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 order said.

A spokesperson for Bharti Airtel declined to comment.

Airtel told the court it had made excess payment of taxes of about ₹923 crore. This was largely because of non-operationalization of certain GST forms and system-related checks that could have forewarned the petitioner about the excess payments. Moreover, as there were no checks on Form GSTR-3B (summary of monthly transactions) that was manually filled up by the petitioner, the excess tax payments went unnoticed.

It said it wanted to correct the returns, but was prevented as there was no enabling statutory procedure implemented by the government. Airtel contested that there was no rationale for not allowing rectification in the month for which the statutory return has been filed. This is also contrary to the statutory scheme of the CGST Act, which provides that the data filled by a registered person will be validated in that month itself, and thereafter any unmatched details be rectified in the month in which it is noticed.