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Legacy of exemptions: Court issues notices to Centre, GSTC

Under the erstwhile tax regime, capital goods that went into production of goods in the states which used to give area-based exemptions were not given input tax credit

Indivjal Dhasmana  |  New Delhi 

GST

Lacunae related to removal of area-based exemptions under the (GST) have become a bone of contention between companies and the government.

In one of such cases, the Uttarakhand High Court has issued notices to the Centre, the Council, the state government and tax officials over the absence of transitional credit for capital goods after area-based exemptions were stopped under

Under the erstwhile tax regime, capital goods that went into production of goods in the states which used to give area-based exemptions were not given input tax credit.

However, now these goods have moved to the taxable category under The capital goods bought before July one, 2017, but used for goods sold after the are also not given input tax credit.

A petitioner engaged in manufacturing of plastics has moved the court against this.

Abhishek Rastogi, partner with Khaitan & Co., said there is legitimate expectancy of these units that proportionate credit on capital goods should be given."

He said article 279-A(4) of the Constitution provides that shall make recommendation with respect to special provisions for area-based exempted units.

First Published: Tue, April 03 2018. 02:09 IST
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