Aditya Birla Fashion and Retail Limited ( ABFRL ), a leading company in India’s branded clothing industry, is facing tax demands of Rs. 74.35 crore due to disagreements with GST authorities over how it claimed tax credits.
According to the Economics Times Report, the Assistant Commissioner of Central GST, Chandigarh, raised a demand of Rs. 2.46 crore. The authorities allege that Aditya Birla Fashion and Retail Limited ( ABFRL ) incorrectly claimed input tax credit ( ITC ) under the Integrated GST ( IGST ) category when it should have been distributed under the Central GST (CGST) and State GST ( SGST ) categories.
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This issue arises from an inter-head adjustment. Discrepancies were identified between the annual GST return ( GSTR-9 ) filed by Aditya Birla Fashion and Retail Limited (ABFRL) and the GSTR-2A report which reflects input credit from vendor invoices. This mismatch contributed to the demand.
The order in Form DRC-07 imposed a demand comprising Tax amounting to Rs. 1.17 crore, Interest of Rs. 2.76 lakh, and a Penalty of Rs. 1.27 crore. Accordingly, the GST authorities have raised a total demand of Rs. 2.46 crore.
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The order was issued after an audit conducted under Section 74 of the Central Goods and Service Tax ( CGST ) Act, 2017. Aditya Birla Fashion and Retail Limited ( ABFRL ) has announced its intention to appeal this decision, arguing that its ITC claims were in line with the law.
In another case, the State Tax Officer of Jammu & Kashmir issued a demand of Rs. 1.89 crore on April 25, 2024. This case relates to the financial year 2018-19 and focuses on discrepancies between the company’s monthly ( GSTR-1 ) and annual ( GSTR-9 ) GST returns as well as vendor defaults in filing their returns. The demand includes tax of Rs. 94 lakh, interest of Rs. 85 lakh, penalty of Rs. 9.4 lakh
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