Nagpur: Goods and Services Tax (GST) recovery notices slapped by Maharashtra Industrial Development Corporation (MIDC) for dues which the state agency reportedly did not charge for as long as nine years have left units within its estates across the state miffed.The industrialists approached chief minister Devendra Fadnavis through Chamber of Associations of Maharashtra Industry and Trade (CAMIT) seeking a reversal of the decision after the notices were served over the last fortnight.MIDC undertakes a slew of activities like water supply and roads, as well as providing other amenities to units in its estates like Butibori or Hingna. These are counted as services provided, and are subject to GST. In the normal course, the tax component is added to the service charges levied on the industries, because an indirect tax like GST can be passed on to the end-user.As per CAMIT, from 2017 to 2022, MIDC did not add the tax component to the charges for its own administrative reasons. “An audit query by GST department later led to a recovery of Rs 700 crore, which further swelled to Rs 1,300 crore after adding penal interest,” the chairperson of CAMIT, Dipen Agrawal, told TOI.“Now, MIDC wants the industries to pay up the tax which it didn’t charge at the relevant time. This comes as an out-of-the-blue action for industries,” Agrawal told TOI. He added that since GST would be paid for a time-barred period, “the industries cannot even get input tax credit (ITC) on the payments”.ITC is a mechanism which sets off GST paid for availing of services or inputs on the sale of end products.The CAMIT representation to Fadnavis says an “administrative delay on part of a statutory govt authority has effectively converted what should have been a tax-neutral transaction into an irreversible additional financial burden.”
