India Inc may get relief in GST transition credit in Budget 2018
Goods and Service Tax (GST) has been effective in India since July 2017, and many taxpayers, exporters, industries and markets have claimed that they faced difficulties in adapting the regime.
In a bid to provide relief to companies, the government is likely to extend deadline for the Goods and Services Tax (GST) transition tax. The upcoming Budget may provide relief to India Inc.
Sources told Zee Business that government may provide six months relaxation to companies by extending the GST transition tax credit deadline up to June 30, 2018.
The crucial move is on the expected lines as the Modi government, preparing for next year's general elections, may provide some reliefs to India Inc in regards to GST transition.
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— Zee Business (@ZeeBusiness) January 9, 2018
Since GST regime's inception in July 2017, the government had given a time period of 180 days to companies for availing the tax credit. The deadline expired on December 27, 2017.
Seeking relief, many companies challenged the GST transition in Delhi High Court. The petition, filed by Hafele India Private Limited, submitted before the HC that firms have failed to see positive demand on products after the GST regime.
The petitioner said the government cannot take two types of taxes on one products.
It may be noted that there are different GST rates on packaging, transport, products and even for buying ingredients.
The court on December 12, 2017, said, “We are of the opinion that the matter requires to be heard in greater detail. In a meanwhile, it is open to the petitioners to proceed and claim credit or pay duty, as the case may be. In case any duty amounts are paid, that will be subject to final outcome of the proceedings.”
The court will hear the matter on GST transitions on January 25, 2018.
The government had given 180 days’ time to companies for claiming tax credit on products which were developed before GST's implementation.
Since the companies had made big investments in older stocks, they had to bear loss by paying previous taxes on the older stocks, after GST's implementation.
Industries, exporters and markets have been demanding GST transition relief for quite some time, and they now expect that the Finance Ministry would consider it in the upcoming Budget.