Bharti Airtel’s ₹9.23 billion GST refund

Government moves Supreme Court against the Delhi court order

In a latest development the government has moved the Supreme Court raising issue of Bharti Airtel’s ₹9.23 billion GST refund. Earlier Delhi High Court order and allowing Bharti Airtel Ltd to claim ₹9.23 billion in tax refunds by rectifying its goods and services tax (GST) returns filed earlier.

A two-judge bench of the high court had allowed the telecom major to seek GST refunds for the period of July-September 2017. The high court had directed the government to verify the excess GST claim within two weeks of the order and refund the amount to Bharti Airtel.

The authorities claimed that Bharti Airtel had under-reported input tax credit from the said period, but the telco said to be paid excess tax of ₹9.23 billion on inputs based on estimates since the GSTR-2A form was not operational during the error period.

As per details, the company had excess input tax credit at its disposal but could not adjust it against the final tax liability. It was due to regulatory and technology-related uncertainties at the time of India’s transition to the new indirect tax regime in July 2017. When the company noticed availability of excess input tax credit, restrictions prevented the telco from claiming that benefit.

The high court order permitted the company to rectify Form GSTR-3B for the error period.

The apex court registry showed the case titled ‘Union of India through its secretary versus Bharti Airtel Ltd’ in the ‘defect list’, which means that a petition filed has errors and need to be rectified before listed in the court.

The petition had been filed against, Bharti Airtel, the GST Council through its secretary, commissioner through the finance ministry’s department of revenue commissioner and the Central Board of Indirect Taxes and Customs (CBIC) via its chairman.

Advocate B Krishna Prasad filed the government’s plea and a caveat has been filed by respondent advocate Rahul Jain. The caveat will prevent the court from taking any action without informing the respondents in this case.

Bharti Airtel stuck in a legal battle of adjusted gross revenue (AGR) with the department of telecommunications (DoT) and now the GST refund case could further blow on its finances.

While the telecom department had estimated Airtel’s dues around ₹37,000 crore, the telco said it owed ₹13,000 crore to the government after self assessment. Along with this amount, Airtel deposited an additional ₹5,000 crore as an ad-hoc payment to cover differences, if any, arising from the reconciliation exercise with the DoT.