Aditya Birla Fashion gets GST Demand worth Rs.2.46 Crore over ITC Claim Dispute

A leading company in India’s branded clothing industry, Aditya Birla Fashion and Retail Limited (ABFRL), is currently facing a total tax demand of Rs. 74.35 crore due to conflicts with GST authorities over how it claimed tax credits.

According to a report, the Assistant Commissioner of Central GST in Chandigarh issued a fresh demand of Rs. 2.46 crore. The authorities argue that Aditya Birla Fashion and Retail Limited (ABFRL) improperly claimed input tax credit (ITC) under the Integrated GST category when it should have been given under the CGST and SGST categories.

The issue derives from an inter-head adjustment. Discrepancies were found between Aditya Birla Fashion and Retail Limited’s (ABFRL) yearly GST return (GSTR-9) and the GSTR-2A report, which shows input credit from vendor invoices. This mismatch leads to this demand.

The order in Form DRC-07 issued a demand for Rs. 1.17 crore in tax, Rs. 2.76 lakh in interest, and Rs. 1.27 crore in penalty. As a result, the GST officials have demanded a total of Rs. 2.46 crore.

The order was given following an audit performed under Section 74 of the Central Goods and Services Tax (CGST) Act of 2017. Aditya Birla Fashion and Retail Limited (ABFRL) has stated its intention to appeal this decision, claiming that its ITC claims were legal.

In another case, the State Tax Officer of Jammu and Kashmir made a demand of Rs. 1.89 crore on April 25, 2024. This case pertains to the financial year 2018-19 and focuses on disparities between the company’s monthly (GSTR-1) and yearly (GSTR-9) GST returns, as well as the default of vendor in filing their returns. The demand comprises a tax of Rs. 94 lakh, interest of Rs. 85 lakh, and a penalty of Rs. 9.4 lakh.