The Assistant Commissioner of CGST & Central Excise, Mumbai Central, granted relief to Woodpecker Movies Private Limited by rectifying and dropping the GST demand of Rs. 26.72 lakh citing retrospective eligibility of Input Tax Credit (ITC) under Section 16(4) of the CGST Act, 2017. The case originated from Order-in-Original issued on August 29, 2024, where the tax authorities confirmed a tax demand of Rs. 26,72,024, including IGST Rs. 2,28,698, CGST Rs. 12,21,663, and SGST Rs. 12,21,663 under Section 73(9) of the CGST Act, 2017. The taxpayer was charged interest under Section 50(3) of the CGST Act and a penalty of Rs. 2,67,202 under Section 73(9) read with Section 122(2)(a) of the CGST Act. The authorities held that Woodpecker Movies Private Limited availed ITC after the prescribed deadline, rendering it ineligible.
Read More: Case digest on Section 16(4) of CGST Act The Finance (No. 2) Act, 2024, amended Section 16(5) and 16(6) of the CGST Act, 2017, allowing ITC claims retrospectively. The government notified these provisions through Notification No. 17/2024-Central Tax, dated September 27, 2024.
Take Your SME to the Next Level with IPO Insights – Click here to Register To take action for the rectification of past orders where ITC was denied but had now become eligible, the government issued Notification No. 22/2024-Central Tax, dated October 8, 2024, outlining a special procedure for rectification under Section 148 of the CGST Act.
Read More: Section 16(4) of GST Act is Constitutionally valid: Chhattisgarh HC On November 27, 2024, Woodpecker Movies Private Limited filed an application for rectification electronically adhering to the prescribed procedure. The company opted to waive the personal hearing and requested a decision based on the merits of the case.
Upon reviewing the rectification request, the Assistant Commissioner concluded that the taxpayer was eligible for ITC under the newly inserted provisions of Section 16(5) and 16(6) and that the original demand order should be rectified. The rectified order issued in February 2025 nullified the previous tax demand, dropped the interest and penalty, and provided full relief to Woodpecker Movies Private Limited