Benefit of transitional credit could not be denied due to non-filing of Tran-1 within due date: High Court
[Siddharth Enterprises v. Nodal Officer [2019] 109 taxmann.com 62 (Gujarat)]
The assessee filed a writ petition before the Gujarat High Court to permit it to file declaration in Tran-1 and Tran-2 for availing of transitional credit of eligible duties of the inputs held in stock on the GST implementation date, i.e., 01-07-2017. The assessee submitted that the declaration in Tran-1
could not be filed due to technical glitches in the GST portal.
The Honorable Court observed that the entitlement of credit of eligible duties on the purchases made in the pre-GST regime was a vested right and could not be taken away due to non-filing of Tran-1 within due date. The right to carry forward credit is right acquired under the repealed Acts which has been saved under the GST Act and, hence, cannot lapse.
Denying carry forward of tax paid under pre-GST regime on stock held on 01-07-2017 would lead to cascading effect of tax as GST would be paid again at the time of sale of such stock. Also, not permitting to carry forward the Cenvat credit on account of non-filing of Tran-1 within due date would affect the working capital of the assessee.
The Honorable court directed the revenue authorities to permit the assessee to file declaration in Tran-1 and Tran-2 enabling it to claim transitional credit of the eligible duties of the inputs held in stock on 01-07-2017. The Court also declared that the due date given under GST for claiming transitional credit should not be construed as mandatory provision.
[Siddharth Enterprises v. Nodal Officer [2019] 109 taxmann.com 62 (Gujarat)]
The assessee filed a writ petition before the Gujarat High Court to permit it to file declaration in Tran-1 and Tran-2 for availing of transitional credit of eligible duties of the inputs held in stock on the GST implementation date, i.e., 01-07-2017. The assessee submitted that the declaration in Tran-1
could not be filed due to technical glitches in the GST portal.
The Honorable Court observed that the entitlement of credit of eligible duties on the purchases made in the pre-GST regime was a vested right and could not be taken away due to non-filing of Tran-1 within due date. The right to carry forward credit is right acquired under the repealed Acts which has been saved under the GST Act and, hence, cannot lapse.
Denying carry forward of tax paid under pre-GST regime on stock held on 01-07-2017 would lead to cascading effect of tax as GST would be paid again at the time of sale of such stock. Also, not permitting to carry forward the Cenvat credit on account of non-filing of Tran-1 within due date would affect the working capital of the assessee.
The Honorable court directed the revenue authorities to permit the assessee to file declaration in Tran-1 and Tran-2 enabling it to claim transitional credit of the eligible duties of the inputs held in stock on 01-07-2017. The Court also declared that the due date given under GST for claiming transitional credit should not be construed as mandatory provision.
No comments:
Post a Comment