Why did Bharti Airtel demand a refund?
In October 2018, Bharti Airtel claimed that it had paid excess GST of Rs 923 crore for July-September, 2017 in the absence of a purchase-related tax return form called GSTR-2A.
GSTR-2A was not in operation during the period. It became operational in September 2018 for availing input tax credit -- the tax paid on inputs that can be adjusted against future tax liabilities.
Because the telco had already submitted its input tax credit details based on estimates, prior to the introduction of GSTR-2A, it sought to rectify returns in order to get a refund of the excess amount it paid. The telco had submitted its monthly Form GSTR-3B based on estimates for the period in question.
The original Central GST Act provided for forms GSTR-1 for details of outward supplies, GSTR-2 for inward supplies data or purchases made, and GSTR-3, a document containing electronically collated details of all transactions in a particular month, filed in GSTR-1 and GSTR-2, and tax liability.
What was the Delhi high court's ruling?
In May 2020, a two-judge bench of the high court allowed Bharti Airtel to seek GST refund and directed the government to verify the company’s claim of having paid an excess amount.
“We allow the present petition and permit the Petitioner to rectify Form GSTR3B for the period to which the error relates," it said.
The central government challenged the high court order in July last year and moved the apex court.
What was the Supreme Court's verdict ?
The apex court on October 28 rejected Bharti Airtel's claim for a refund of Rs 923 crore by rectifying its GST returns for July to September 2017.
A bench of justices A M Khanwilkar and Dinesh Maheshwari set aside the Delhi high court that allowed the telecom major to rectify Form GSTR-3B for the period, saying such directions “cannot be sustained”.
"Any unilateral change in such return as per the present dispensation would have a cascading effect on the recipients and suppliers associated with the concerned transactions. There would be complete uncertainty and no finality could ever be attached to the self-assessment return filed electronically," the bench said.The court also noted that any indulgence shown contrary to the statutory mandate would not only be an illegality but would also lead to a potentially chaotic situation and collapse of the tax administration of the Centre, states, and Union territories.