- About us
- Site map
- Contact Us
- Contact Us
The Input Tax Credit (‘ITC’) of the Petitioner had been restricted in Form W for the months of December 2013 to May 2014 for separate orders for every month. The restriction of the amount of ITC has been done predominantly on the head of (a) Prior sufferance of Taxes; (b) ITC on reversal on wastage; and (c) Ineligible claim of ITC on goods.
In respect of amount for prior sufferance of taxes, the Revenue had claimed that some of the sellers from whom the petitioner had purchased the goods had not paid tax to the Government. In this regard, the Madras HC observed that in the case of Infiniti Wholesale Limited [2017 (99) VST 341 (Mad)] had held that ITC cannot be disallowed on the ground that the seller had not paid tax to the Government, when the purchaser is able to prove that the seller has collected tax and issued invoices to the purchaser.
It was further observed that in the case of Shri Ranganathar Valves Private Limited [W.P. No. 41670 to 41670 of 2018] it had been held that the assessee would be entitled to avail ITC where such products had been used for the manufacture of export goods. In light of the said observations, the Madras HC set aside the issue with regard to restriction of the amount of ITC for prior sufferance of taxes is remanded back to the Assessing Officer for fresh consideration. It was further held that it is open for the assessing officer to issue a SCN to the petitioner calling for his objections with regard to ITC on reversal on wastage and Ineligible claim of ITC on goods.
Sri Ranganathar Valves Private Limited [W.P.Nos.38488 to 38493 of 2015]
The Petitioner had duly transitioned the credit of Service Tax and VAT under the GST Regime by filing Form TRAN-1. Subsequent to the filing of the Form, the Petitioner received confirmation of the same from GSTN portal, however, the said credit was not reflected in the Petitioner’s electronic credit ledger. In respect thereto, the Petitioner had filed a grievance on the GSTN Portal.
However, the Respondent did not allow the revision of TRAN-1 or manual application as there was no evidence of technical glitch as claimed by the Petitioner. Aggrieved, the Petitioner filed a Petition before the Bombay HC seeking a Writ of mandamus directing the Respondent’s to allow transitional credit.
The Bombay HC observed that despite the admitted successful filing of TRAN-1 by the Petitioner, the request for transitioning of credit had not been approved by the Respondent merely on the basis that there were no technical glitches on the GSTN side. It was further observed that there was no further explanation or clarification or evidence on the issue by the Respondents.
The Bombay HC also noted that the whole objective of digitization is to convenience the tax payers and not to harass them. Further, the GST system is still evolving in its implementation. Merely because there were no technical glitches in the GSTN with respect to the Petitioner’s TRAN-1 the claim of the Petitioner, if it was otherwise eligible in law, cannot be rejected for no apparent fault on the part of the Petitioner. It was observed that this cannot be the objective of the GST system or digitization. Such a situation cannot be countenanced as it would be wholly unfair and unjust.
Accordingly, the HC directed the Respondents to consider the case of the Petitioner on merits and take necessary action within 4 weeks.
BMW India Financial Services Private Limited [WP-LD-VC-85 of 2020]
The Petitioner had delayed in filing of some of their monthly GSTR-1 and GSTR-3B Returns. Therefore, the Petitioner remitted interest on such late filing of return on the net tax liability. However, the Respondent issued garnishee notices to the customers of the Petitioner and demanded interest the gross tax liability. Aggrieved, the Petitioner preferred a Writ before the Bombay HC.
The Bombay HC observed that Section 50 of the CGST Act was introduced by Finance (No. 2) Act, 2019 for charging interest on the net cash tax liability. The said amendment was made effective prospectively from 01 September 2020, although the GST Council in its 39th meeting had recommended to make the said amendment effective retrospectively w.e.f. 01 July 2017. Accordingly, in order to implement the decision of the GST Council in its true spirit within the present legal framework, field formations had been instructed to recover interest only on the net cash tax liability for the period 01 July 2017 to 31 August 2018 and the keep those show cause notices in the call book till retrospective amendment in section 50 of the CGST is carried out.
In light of the above observations, the Bombay HC observed that no live issue survives for adjudication in the instant case as the question has already been answered by the Board. Accordingly, the Bombay HC quashed the garnishee notices issued by the Respondent to the customers of the Petitioner.
KLT Automotive and Tubular Products Limited [W.P. No. 983 of 2020]
Although the GST Council had firstly recommended levy of interest on net cash liability back in its 31st Council Meeting held on 22 December 2018, the same has been effectuated only recently in September 2020. The Telangana HC in the case of Megha Engineering and Infrastructure Limited [2019 (26) G.S.T.L. 183] on 18 April 2019 had held that the interest would be applicable on gross liability as the recommendations of the GST Council was only on paper.
However, subsequently, the Madras HC in the case of Refex Industries Limited [Writ Petition Nos.23360 and 23361 of 2019] had held that the amendment to Section 50 of the CGST Act clearly seeks to correct an anomaly in the law and therefore, should be read as clarificatory and to operate retrospectively. Subsequently, the CBIC had also cleared the air by issuing Press Release dated 26 August 2020 wherein it had been provided that although the amendment to Section 50 of the CGST Act has been made effective prospectively in view of technical limitations, no recoveries shall be made for the past period. Acordingly, as things stand today, there is no anomaly regarding interest on delayed filing of GST Returns.
The Central Government vide Notification S.O. 3874(E) dated 27 October 2020 had inter alia extended the due dates for filing declaration and making payment of tax dues thereof under the Vivad Se Vishwas Scheme. It had been notified that the declarant would be required to pay the amount within a period of 15 days from the date of receipt of certificate from the authority.
It had been further provided that declarant who files declaration on or before 31 December 2020 can make payment without additional amount on or before 31 March 2021. Such requirement was contemplated to result into undue hardship for the declarant in whose case the period of 15 days expires before 31 March 2021.
In respect thereto, the CBDT vide Circular No. 18/2020 dated 28 October 2020 has clarified that when a declarant files a declaration on or before 31 December 2020, the Designated Authority shall allow the declarant to make payment without additional amount on or before 31 March 2021
The Government vide Notification dated 27 October 2020 has extended the due dates under the Direct Tax Vivad Se Vishwas Act, 2020 in the following manner:
The CBDT had earlier extended the due date for all IT Returns for the FY 2019-20 to 30 November 2020. In order to provide more time to taxpayers for furnishing of IT Returns, it has been decided to further extend the due date for furnishing of IT Returns as under:
Consequently, the date for furnishing of various audit reports under the IT Act including tax audit report and report in respect of international / specified domestic transaction has also been extended to 31 December 2020. Further, in order to provide relief to small and middle-class taxpayers, the CBDT has further extended the due date for payment of self-assessment tax for the taxpayers whose self-assessment tax liability is up to Rs. 1 lakh.
Accordingly, the due date for payment of self-assessment tax for the taxpayers who are not required to get their accounts audited was extended from 31 July 2020 to 30 November 2020 and for the auditable cases, this due date was extended from 31 October 2020 to 30 November 2020. In order to provide further relief for small and middle-class taxpayers in the matter of payment of self-assessment tax, the due date for payment of self-assessment tax date has been extended in the following manner:
CBIC vide Press Release dated 24 October 2020 has extended the due date for furnishing Annual Return in Form GSTR-9 and Reconciliation in Form GSTR-9C for the F.Y. 2018-19 till 31 December 2020
In another twist to the tale of transitional credit, the division bench of the Madras HC has reversed the single judge order in the case of Sutherland Global Services Private Limited [2019 (30) G.S.T.L. 628]. While the single judge had held in the favour of the Assessee by allowing carry forward of the accumulated credits of Education Cess, Secondary Higher Education Cess and Krishi Kalyan Cess (‘Cesses’) into GST, the division bench has held otherwise. The rationale of the division bench for arriving at the decision to disallow the credit of cesses into GST has been summarised hereunder:
Cess vs. Tax
101st Constitutional Amendment Act
In light of the above reasons, the Madras HC allowed the Appeal of the Revenue and set aside the judgement of the single judge and held that the Assessee was not entitled to carry forward and set off of unutilised cesses against the GST Output Liability with reference to Section 140 of the CGST Act.
Asst. Commissioner of CGST and C. Ex. vs. Sutherland Global Services Private Limited [WP No.53 of 2020]
The CBIC released a series of Notifications on 15 October 2020 inter alia notifying the due dates for filing Form GSTR-1 and GSTR-3B. said notifications have been summarized hereunder:
Notification No. 75/2020 – C.T. dated 15 October 2020
Time limit for filing Form GSTR-1 by registered persons having aggregate turnover of more than Rs. 1.5 crores, in the preceding F.Y. or the current F.Y., for each of the months from October 2020 to March 2021 till the 11th of the succeeding month.
Notification No. 76/2020 – C.T. dated 15 October 2020
Form GSTR-3B for each of the months from October 2020 to March 2021 shall be furnished electronically through the common portal, on or before the 20th day of the succeeding month. However, it has been provided that for taxpayers, having aggregate turnover of upto Rs. 5 crores, in the previous F.Y., whose principal place of business is in the States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman, and the Nicobar Islands or Lakshadweep, the due date for filing GSTR-3B shall be filed on or before 22nd of the succeeding month.
It has been further provided that for taxpayers having an aggregate turnover of up to Rs. 5 crore in the previous F.Y., whose principal place of business is in the States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi, the return in FORM GSTR-3B shall be furnished electronically through the common portal, on or before the 24th of the succeeding month.
Furthermore, registered persons filing Form GSTR-3B, shall discharge their liability towards tax by debiting the electronic cash ledger or electronic credit ledger, and the liability towards interest, penalty, fees or any other amount payable, by debiting the electronic cash ledger, not later than the last date on which Form GSTR-3B is due.
Notification No. 77/2020 – C.T. dated 15 October 2020
Notifies that filing of Annual Return in Form GSTR-9 and Reconciliation Statement in Form GSTR-9C shall be optional for F.Y. 2017-18 to F.Y. 2019-20 for taxpayers having aggregate turnover of less than Rs. 2 crores.
The DGFT vide Public Notice No. 25/2015-20 dated 13 October 2020 has laid down the procedure for application and issuance of scrips under Rebate of State and Central Taxes and Levies (‘RoSCTL’). The key highlights of the said notification have been summarized hereunder:
Sign up for the Newsletter