A company challenged the GST department's denial of input tax credit (ITC) because their input service distributor (ISD) couldn't file a specific tax form. The High Court has issued a notice to the department regarding this.

A company is contesting the tax authorities' refusal to allow them to use input tax credit (ITC) received from their input service distributor (ISD). The issue stems from the ISD's inability to file Form GSTR-6, which is required to carry forward transitional credit under the Central Goods and Service Tax Act (CGST Act).

The company argues that the GSTR-6 form lacks a specific section for carrying forward transitional credit, hindering the ISD's filing. They further highlight:

• A letter from the ISD to the authorities outlining the filing difficulty.
• A pending case before the Punjab and Haryana High Court concerning the ISD's challenge to the denial of transitional credit carry forward.
• A similar case before the Bombay High Court regarding ISD's ability to carry forward credit under Section 140(7) of the CGST Act (currently awaiting a recommendation from the GST Council).

The company emphasizes their compliance with Rule 36 of the CGST Rules by obtaining the invoice for ITC distribution from the ISD. They assert their right to utilize the disputed credit of Rs. 1,12,13,823/-.

Based on these arguments, the court has issued a notice to the authorities returnable on May 1st, 2024. Additionally, the court has ordered a stay on any coercive action by the authorities until the petition's resolution.

Topic-Samsung India Electronics Private Limited Versus Union of India

Citation-2024 TAXONATION 702 (GUJARAT)

Date-21/03/2024

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