Supreme Court allows Centre's appeal against giving Airtel Rs 923 crore as GST refund

The Supreme Court on Thursday permitted the Central Government to appeal against the Delhi High Court's 2020 order which allowed Bharti Airtel to claim a Rs 923 crore refund by rectifying its Goods and Services Tax (GST) returns filed by the telecom company for July to September 2017. A two-judge Bench of the Delhi High Court had given permission to Bharti Airtel to seek GST refunds and also asked the government to verify the excess GST claim.

The petition for the appeal was filed against four respondents of Bharti Airtel, the GST Council, through its secretary, the commissioner through the finance ministry's department of revenue commissioner and the Central Board of Indirect Taxes and Customs (CBIC) through its chairman.

Delhi HC asks government to verify excess GST

The Delhi High Court through its order had asked the government to verify the excess GST claim and refund the balance amount to Bharti Airtel. The telecom giant had submitted a plea claiming that it had paid an excess amount of Rs 923 crore as tax, but due to the GSTR-2A form not being valid during the error period, the company qualified for a refund. The government counter-filed the claim pointing to the fact that Bharti Airtel had under-reporting its input tax credit in 2017.

The Supreme Court said in its order that it agrees with the central government, “Any indulgence shown contrary to the statutory mandate would not only be an illegality but in reality, would simply lead to a chaotic situation and collapse of the tax administration of Union, States and Union Territories”. The order continued, “As a result, Airtel cannot be permitted to unilaterally carry out rectification of its returns, submitted electronically in Form GSTR¬3B, which inevitably would affect the obligations and liabilities of other stakeholders, because of the cascading effect in their electronic records.”

Bharti Airtel’s decision to opt for moratorium method of payment

Earlier this week, Bharti Airtel informed the Central government that the telecom giant will opt for the four-year moratorium on payment of AGR and spectrum dues. The government offered the dues moratorium method of payment to the telecom companies as a part of the relief package for the telecom sector. According to various sources, Airtel informed the government that it will choose the four-year moratorium on AGR (Adjusted Gross Revenue) and spectrum dues along while selecting the option of prepaying as per NIA (Notice Inviting Applications) norms.

The government had recently informed the telecom companies to convey their decisions regarding the four-year dues moratorium as they look to implement their new reforms for the telecom sector. The companies will have a lot of time to inform the government on the option for converting the interest amount into equity. The companies will have at least 90 days to decide if they want to convert their interest into equity pertaining to the moratorium period.

(with ANI and PTI inputs)

(Image: ANI)