Stories
GST Council Meet: Experts Seek Clarity on ITC, Arrest Powers and Compliance
- •Tax experts urge the GST Council to prevent ITC denial for bona fide clerical errors where transactions are genuine and tax is paid.
- •Proposals include allowing companies to transfer unused ITC across states to unlock liquidity and ease working capital pressures.
- •Legal professionals highlight the need to keep routine ITC disputes outside the criminal framework and introduce judicial oversight for arrests.
- •Discussions will likely cover changes to Section 17(5) on blocked credits, e-way bill compliance, and inverted-duty refunds.
- •Granting export status to work done for overseas clients without goods leaving India could benefit sectors like semiconductors and electronics.
Key Questions Answered
Tax experts have urged that input tax credit should not be denied for genuine clerical errors when the underlying transaction is legitimate and tax is paid, while also recommending cross-state ITC transfers within the same legal entity and faster refunds for exporters.
Experts suggest that the GST Council should revisit enforcement frameworks to draw a clearer line between interpretational tax disputes and criminal actions. Proposals include keeping routine compliance disputes outside the criminal framework and ensuring proper judicial oversight for arrests, while maintaining strict penalties for deliberate fraud.
Granting export status to work completed for overseas customers even when goods do not leave India could significantly benefit sectors like semiconductors and electronics. This would allow domestic contract manufacturers processing materials for foreign clients and delivering finished goods locally to receive similar favorable treatment.
