Tax demands due to non-reflection of the ITC in GSTR 2A/GSTR 2B despite paying the same to the seller – Landmark order by High Court
One of the most common issue faced by multiple taxpayers is of tax demands due to non-reflection of the input tax credit in GSTR 2A/GSTR 2B despite paying the same to the seller. Below is a summary of the decision.
Surender Gupta, the petitioner (Karta), contested a ruling concering GST obligations on a commercial property in Noida. He argued that he had already paid the necessary GST on a one – time lease payment of Rs. 97,18,500 to the New okhla Development Authority (NOIDA), amounting to Rs. 17,49,330 at an 18% rate. However, this payment was not correctly reflected in his GSTR 2A due to a mistake made by NOIDA, which led the GST department to initiate further proceedings against him. Gupta contended that he should not be penalized for NOIDA’s error and sought compensation for the penalties imposed on him.
Upon reviewing the case, the court acknowledged that while NOIDA accepted the GST payment, it was deposited under the wrong category, confirming that NOIDA was at fault. As a result, the court instructed NOIDA to pay Gupta Rs. 19,22,778 within 15 days, emphasizing that Gupta should not bear the consequences of NOIDA’s mistake. The court also highlighted that compensation should align with the loss incurred and set out provisions for compliance and reporting to ensure the order was carried out.
The copy of the order is as under:
