Madras HC Sets Aside Tax & Interest on Unutilised ITC Reflected in GSTR-2A/2B

Madras HC Sets Aside Tax & Interest on Unutilised ITC

The Madras High Court has set aside a tax demand along with interest for unutilised ITC reflected in the GSTR-2A and GSTR-2B returns. The decision indicates a corrective approach, emphasizing taxpayer compliance and accurate reporting without penal repercussions when errors are addressed.

The court's ruling allows for liberty to the authorities to act if it is established that ITC claims had not been reversed. This nuanced perspective signals a more lenient regulatory approach towards reporting discrepancies that may arise from taxpayer reporting under the GST framework.

Practitioners should advise clients on the importance of keeping detailed and accurate records to avoid unnecessary tax burdens. The ruling serves as a reminder for taxpayers to actively engage with their GSTR filings to navigate potential audits effectively.