The Principal Commissioner of Central GST for Ahmedabad has awarded a penalty to Vodafone Idea Limited of an amount of ₹6,47,13,708. The penalty was awarded over "alleged incorrect availing of CENVAT credit on capital goods."
The GST commissioner has imposed the penalty under the legal confines of Rule 15(3) of the CENVAT Credit Rules, 2004 and Section 78(1) of the Finance Act, 1994. The penalty amount includes taxes and interest.
Vodafone Idea in its filing to the exchanges said that the maximum impact was to the extent of tax demand, interest and penalty. The company also stated that it did not agree with the ruling and is likely to file an appeal.
CENVAT or central value added tax is a form of Value Added Tax upon which a manufacturer or service provider can claim a concession for payment of excise. Although GST has subsumed several taxes, many manufacturers and product-categories are likely to involve VAT (value added tax) computations as an indirect-tax.
