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Awfis Space Solutions has disclosed in a BSE filing that its bank accounts with HDFC Bank and ICICI Bank were provisionally attached by the Joint Commissioner of State Tax in Mazgaon, Mumbai. The move refers to a purported excess input tax credit (ITC) violation of INR 4.42 crore that was availed in October 2024. The firm revealed that though this ITC was originally reversed in FY 2023-24, it was recovered in line with a Supreme Court order. But after changes in the CGST Act in 2025, the firm has now opted to reverse the ITC once again, with no financial implication on its operations. The board also separately approved the grant of 1,44,382 employee stock options under its ESOP scheme.
The Joint Commissioner of State Tax at Mazgaon, Mumbai, has provisionally frozen the operative bank accounts of Awfis Space Solutions, maintained with HDFC Bank and ICICI Bank. The company informed this development in a filing with the Bombay Stock Exchange (BSE). This was done in relation to a claimed violation of excess input tax credit (ITC) worth INR 4.42 crore. Awfis had availed this sum in its GSTR-3B return for October 2024, which was said to be higher than the ITC available in GSTR-2B for October 2024. Advertisement
The company justified in its filing that the litigant ITC was initially taken and reversed thereafter in GSTR-3B returns for FY 2023-24. The amount was subsequently recouped in October 2024 due to the judgment by the Supreme Court in the Safari Retreats case. This ruling offered relief in regards to eligibility for ITC under certain situations, hence encouraging Awfis to recover the amount.
But amendments brought in the CGST Act under Section 17(5)(d) through the Finance Bill 2025 made the company change its stand. Awfis has now chosen to reverse the availed ITC again, in compliance with the revised regulatory environment. The firm assured all concerned that the reversal would settle the issue specified in GST DRC-22 and would not be operationally profitable or loss-incurring for its business.
Independently, Awfis said that the board of directors has sanctioned issuing 1,44,382 employee stock options (ESOPs), convertible into an equivalent number of shares of equity. These shares would have a face value of INR 10 each and are to be issued under the Awfis Space Solutions Employee Stock Option Scheme - 2024.
The provisional blocking of bank accounts of Awfis Space Solutions brings to the fore the continued vigilance of ITC claims by tax authorities. By choosing to reverse the ITC in dispute after recent legislative changes, the company has made efforts to stay compliant and solve the problem without financial costs. The background of the case, as well as the original ITC reversal in FY 2023-24 and its reclamation following the ruling of the Supreme Court, reveal the intricacies of tax compliance in a fluctuating legal backdrop. Moreover, the company's action to extend employee stock options highlights its attention to employee care and long-term development, despite regulatory setbacks.
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