The Kerala High Court has recently made a crucial decision about how businesses can claim tax credits under the Goods and Services Tax (GST) system.
GST Tax Credit Rules Confirmed
The court confirmed that certain rules under the GST law are valid. These rules (Sections 16(2)(c) and 16(4) of the CGST/SGST Act) set the conditions and deadlines for claiming tax credits, which are essential for ensuring businesses comply with GST regulations.
Tax Credit is a Benefit, Not a Right
The court made it clear that getting tax credit is a benefit provided under the GST law, not an automatic right. Businesses have to follow specific rules and conditions to get this benefit.
Rules for Claiming Tax Credit
To claim a tax credit, a business must make sure that the supplier has paid the tax on the goods or services they provided. This rule helps ensure that the tax system runs smoothly and prevents any loss of tax revenue. It also makes sure both suppliers and buyers are accountable.
Some Flexibility for Early GST Period
The court recognized that businesses faced many challenges when GST was first introduced. Because of this, it allowed some flexibility. For specific situations mentioned in two GST circulars, businesses can claim tax credits within a certain timeframe if their claims are genuine.
Extended Deadlines for Tax Credit Claims
One of the most helpful parts of the court's decision is extending the deadline for filing tax returns and claiming tax credits for the early period of GST implementation. The court decided that businesses could file their claims by November 30th for the period from July 1, 2017, to November 30, 2022. This extension helps businesses correct any mistakes and comply with GST rules more easily.
Topic- Trand Links Versus Union of India
CItation- 2024 TAXONATION 1190 (KERALA)
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