Updater Services Limited — Important, 26-02-2025: General Updates

GST Department has raised a demand for ₹6.52 crore, disallowing the reversal of GST related to credit notes issued for routine contractual adjustments, citing that the company has not shown that clients reversed their corresponding input tax credits (ITC). However, Updater Services Limited believes it can successfully appeal based on legal grounds. The company argues that their situation pertains to a reduction in the value of supply due to service deficiencies, falling under Section 34 of the GST Act, which doesn’t require client ITC reversals when credit notes are issued. Furthermore, proposed amendments to Section 34 confirm that no such requirement currently exists. The company plans to file a writ petition with the Madras High Court to address jurisdictional and procedural issues rather than navigating a lengthy appeals process. Investors should watch closely as the outcome could significantly impact the company's financial standing.