APL Apollo TubesBSE -1.54 %, a Mumbai-based pipe and tube manufacturer, has moved the Bombay High Court against the central government and the Goods and Services Tax Network (GSTN) for allegedly infringing on its right to do business.
In a writ petition filed on Tuesday, the Bombay Stock Exchange-listed company alleged that GSTN tampered with the company’s
GST Tran-1, which is the form for claiming credit of taxes paid under the earlier tax regime prior to the rollout of goods and services tax (GST) in July 2017.
The company contended that it had claimed tax credit of around Rs 16 crore, but due to an error on the part of the GSTN only about Rs 4 crore was credited to the company. This was akin to the government going back on its promise to pay money in a normal business transaction, APL ApolloBSE -1.54 % Tubes claimed in its petition.
“Union of India may be directed to urgently take over GSTN and to replace its top management in public interest,” the petition said.
About eight months after GST rollout, many companies still complain that they have been facing troubles with filing returns, especially with regard to availing transitional credit, experts said.
“Several businesses have faced significant challenges on the GST portal since July 2017 and the recent issues faced during the e-way bill introduction indicate that it would take some more time for the portal to stabilise in all respects,” said M S Mani, partner at Deloitte India. “It is expected that all future changes on returns, invoice matching, reverse charge, etc., would be introduced only after the necessary changes in the GST portal are tested and validated,” he said.
Several companies are now knocking the doors of the courts, according to legal experts.
“Many companies have approached the courts for clarity around various issues, including transitional credits, in the GST, and, to be fair, the government has provided with clarity in numerous cases,” said Abhishek A Rastogi, partner at law firm Khaitan & Co. “As far as GSTN is concerned, this raises a question on the basic right of companies to operate in India as per the Constitution and data tampering is very serious,” he said.
Transitional credit has been one of the key points in which the government has been assertive.
Taxmen suspect that some companies are misusing the provision to file fake returns to claim high transitional credits.
The indirect tax authorities have been inquiring about transition credit for past few months. ET was the first to report on September 21 last year that tax officials had asked about 5,000 companies, including some big manufacturers that figure in the BSE 500 list, to provide explanation on transition credit they claimed in July under GST.
The move was part of an investigation the indirect tax department had launched after the Central Board of Excise and Customs (CBEC) in a letter dated September 11, 2017 asked chief indirect tax commissioners to verify all transitional credit claims beyond Rs 1 crore.
Many companies have been complaining of problems with the credit.
APL Apollo Tubes has a market cap of about Rs 3,000 crore.
In its petition, the company urged the high court to order the central and Maharashtra governments to conduct a high-level enquiry – through independent IT experts who have no business connection with GSTN – against GSTN for tampering with GST TRAN-1 filed by the company, the petition said.
The next date of hearing for the petition is February 23.
Source: economictimes.indiatimes.com