Unutilized accumulated input tax credit of notified goods on account of inverted duty structure shall not lapse: High Court
[Shabnam Petrofils (P.) Ltd. v.. Union of India [2019] 108 taxmann.com 15 (Gujarat)]
The applicant was a manufacturer and seller of textile goods. It filed a Special Civil Application before the Gujarat High Court challenging the provisions of the CGST Act, 2017, notification and
circular which prohibits the refund of accumulated ITC in respect of inverted duty structure.
The High Court observed that certain goods or services have been notified by the Dept. in respect of which refund of accumulated ITC, on account of inverted rate structure, shall not be available. The said notification, as amended by a subsequent notification, provided that accumulated ITC lying unutilized on the inward supplies received up to 31-07-2018, would lapse. The High Court held that no inherent power could be inferred from the provision of refund under the CGST Act, 2017 which could empower the Central Government to lapse unutilized ITC accumulated on account of inverted rate structure. Thus, it has been held that the accumulated ITC lying unutilized in respect of notified goods, on account of inverted duty structure, would not lapse.
[Shabnam Petrofils (P.) Ltd. v.. Union of India [2019] 108 taxmann.com 15 (Gujarat)]
The applicant was a manufacturer and seller of textile goods. It filed a Special Civil Application before the Gujarat High Court challenging the provisions of the CGST Act, 2017, notification and
circular which prohibits the refund of accumulated ITC in respect of inverted duty structure.
The High Court observed that certain goods or services have been notified by the Dept. in respect of which refund of accumulated ITC, on account of inverted rate structure, shall not be available. The said notification, as amended by a subsequent notification, provided that accumulated ITC lying unutilized on the inward supplies received up to 31-07-2018, would lapse. The High Court held that no inherent power could be inferred from the provision of refund under the CGST Act, 2017 which could empower the Central Government to lapse unutilized ITC accumulated on account of inverted rate structure. Thus, it has been held that the accumulated ITC lying unutilized in respect of notified goods, on account of inverted duty structure, would not lapse.
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