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Informist, Wednesday, Mar. 26, 2025

 

NEW DELHI – The Supreme Court has said that businesses and companies can rectify human or arithmetical errors in Goods and Services Tax filings and buyers should neither be penalised nor input tax credit be denied for the errors of their suppliers. The Central Board of Indirect Taxes and Customs must re-examine the provisions or timelines fixed for correcting the bonafide errors, said the apex court.

 

"Timelines should be realistic as lapse/defect invariably is realized when input tax credit is denied to the purchaser when benefit of tax paid is denied," said the top court. Purchaser is not at fault, having paid the tax amount, said the court, adding that he suffers because he is denied benefit of tax paid by him. Consequently, he has to make double payment, said the top court.

 

The bench led by Chief Justice of India Sanjiv Khanna said that human errors and mistakes are normal, and errors were also made by the tax department. "Right to correct mistakes in the nature of clerical or arithmetical error is a right that flows from right to do business and should not be denied unless there is a good justification and reason to deny benefit of correction," said the bench, also comprising Justice Sanjay Kumar. "Software limitation itself cannot be a good justification, as software is meant to ease compliance and can be configured," said the court. 

 

Abhishek Jain, Indirect Tax Head and Partner at KPMG said, "This judgement by the Supreme Court allowing revision of filings made in GSTR-1 and GSTR-3B beyond the period mentioned in the CGST Act, provided there is no loss of revenue, is a significant step forward". This decision is not just a short-term relief but a long-term solution that opens many doors for addressing various issues faced by taxpayers, said Jain. Businesses should take this opportunity to review for any similar issues and assess if they can benefit from this judgement, Jain added.

 

The apex court dismissed the Central Board of Indirect Taxes and Customs's appeal against a Bombay High Court order in the case involving Aberdare Technologies Pvt. Ltd. The high court had allowed the rectification of GST returns either electronically or manually for the company.  End

 

Reported by Surya Tripathi

Edited by Deepshikha Bhardwaj

 

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