Importers Availing Tax Credit on Extra Taxes Paid Under I-T Lens

Companies that were asked to pay additional indirect taxes on certain imports have come under the taxman’s lens again for availing of input tax credit on the additional amount paid earlier as penalties. The Department of Goods and Services Tax (DGST) has started issuing notices to the importers for availing of the tax credit against the additional GST paid.

According to the people aware of the matter current regulations allow importers to ascertain valuation of their imports and pay GST and other duties on that. In most cases, importers provide valuation detail through the bill of entry-a legal document that is filed on arrival of the imported goods.

The tax department in the past two months initiated an inquiry into the bill of entry and discovered discrepancies in the valuation of many imports. Importers were then asked to pay additional taxes for goods imported in 2018/19 as penalty.

The question now is whether the importers can avail of input tax credit on the additional taxes paid for the past years.

Under the GST framework, input tax credit is essentially taxes paid on raw materials (or input services). This can be used to reduce future GST liability S-ET

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *