GST Department Asks HDFC, ICICI To Attach Awfis’ Bank Accounts

SUMMARY

On February 21, Awfis said it has received copies of orders in Form GST DRC-23 from tax authorities in Mumbai, directing HDFC and ICICI banks to restore the company's operative bank accounts held with them

On February 19, Awfis had received copies of orders from Mumbai's joint commissioner of state tax directing the banks to attach the accounts under Section 83 of CGST Act, 2017

Awfis clarified that the amount was initially availed and then reversed in GSTR-3B of FY24. It was later reclaimed in October following a Supreme Court decision

Update | February 21, 4:14 PM

Coworking space provider Awfis’ bank accounts, which were frozen by tax authorities, have now been restored.

In an exchange filing, Awfis said it has received copies of orders in Form GST DRC-23 from tax authorities in Mumbai, directing HDFC and ICICI banks to restore the company’s operative bank accounts held with them. The form is generally issued when there are no proceedings pending against a defaulter warranting the attachment of bank account(s).

“We wish to inform you that the Company has now received copies of orders in Form GST DRC-23 from the Joint Commissioner of State Tax, Nodal Division, Mumbai – 2. These orders direct HDFC Bank Limited and ICICI Bank Limited to restore the company’s operative bank accounts held with them,” Awfis said.

Original | February 19, 5:03 PM

The GST department has asked HDFC Bank and ICICI Bank to provisionally attach the operative bank accounts of coworking space provider Awfis over claiming excess input tax credit (ITC).

In an exchange filing, Awfis said it has received copies of orders from Mumbai’s joint commissioner of state tax directing the banks to attach the accounts under Section 83 of CGST Act, 2017.

The section gives the GST department the authority to attach provisionally any property, including bank accounts, belonging to the entity concerned.

The tax authority issued Form GST DRC-22 to the banks on February 18 for the attachment of the bank accounts due to excess input tax credit (ITC) of INR 4.42 Cr claimed by Awfis.

The company informed that this claim is beyond the available ITC in GSTR–2B for the month of October 2024. GSTR-2B provides eligible and ineligible Input Tax Credit (ITC) for each month, similar to GSTR-2A but remains constant or unchanged for a period.

Awfis clarified that the amount was initially availed and then reversed in GSTR-3B of FY24. GSTR-3B is a self-declared summary GST return filed every month. Entities need to report the summary figures of sales, ITC claimed, and net tax payable in GSTR-3B.

The said amount was then reclaimed in October after a decision tendered by the Supreme Court in the case of Safari Retreats. In the month, the Supreme Court ruled in favour of Safari Retreats in a GST case, allowing the company to claim ITC on construction costs for rental properties.

However, the decision was overturned earlier this month owing to the amendments introduced under Section 17(5)(d) of CGST Act of The Finance Bill 2025. Following this, Awfis said it has decided to reverse the above amount of ITC.

“The said reversal will result in resolution of the issue as identified by the concerned order in GST DRC-22. Therefore there will be no financial impact on the entity in relation to the said Order,” Awfis said.

In a couple of separate exchange filings, Awfis informed the bourses of allotment of 1.44 Lakh stock options under Awfis Space Solutions Employee Stock Option (ESOP) Scheme – 2024 and 1.35 Lakh ESOPs under Awfis Stock Option Plan, 2015.

The developments come over a week after the company reported a consolidated net profit of INR 15.18 Cr in the third quarter of the fiscal year 2024-25 (Q3 FY25) as against a loss of INR 6.29 Cr in the year-ago quarter.

Its revenue from operations stood at INR 317.72 Cr in Q3 FY25, up 44% year-on-year and 9% sequentially.

Shares of Awfis ended today’s trading session 2.77% higher at INR 659.95 on the BSE.