Legacy of exemptions: Court issues notices to Centre, GSTC

Lacunae related to removal of area-based exemptions under the goods and services tax (GST) have become a bone of contention between companies and the government. 

In one of such cases, the Uttarakhand High Court has issued notices to the Centre, the GST Council, the state government and tax officials over the absence of transitional credit for capital goods after area-based exemptions were stopped under GST. 

Under the erstwhile tax regime, capital goods that went into production of goods in the states which used to give area-based exemptions were not given input tax credit. 

However, now these goods have moved to the taxable category