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Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

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GST Update on retrospective amendment made in Transitional Provisions vide notification no.43/2020 dated 16th May 2020 40/2020-21

GST Update on retrospective amendment made in Transitional Provisions vide notification no.43/2020 dated 16th May 2020 40/2020-21

GST Update on retrospective amendment made in Transitional Provisions vide notification no.43/2020 dated 16th May 2020

In our earlier update on transitional credit,  we have discussed on Delhi high court decision in the case of M/s Brand Equity regarding the transitional provisions where the judiciary has held that the substantive right of the taxpayer cannot be forfeited in terms of Article 300 A of the constitution. In addition to this the Hon’ble High Court has also held that the time limit prescribed by Rule 117 is only directory in nature and not mandatory as there was no time limit prescribed by the regulatory Sec 140 of the CGST Act 2017. The judgement pronounced by the Delhi High Court also states that when there is no specific provisions under the Act prescribing the time limit, the residuary provisions of the Limitation Act is applicable and the period of 3 years should be the taken into consideration and thus a period of three years from 1st July 2017 would be the maximum period for availing of an input tax credit and allowed taxpayers to. Therefore, the Hon’ble Court has allowed all taxpayers in the country to furnish fresh FORM GST TRAN-1 within 30th June 2020.

CBIC issued a notification 43/2020 (CT) on 16th May announcing May 18, 2020, to be the effective date for the implementation of the provisions pertaining to transitional credit for un-availed CENVAT which was amended under Section 128 of the Finance Act, 2020. In Budget 2020, Section 128 of Finance Act was inserted which provided a retrospective amendment in section 140 of transitional provisions under the CGST Act, giving the power to prescribe a time limit for transitioning credit. Under the said amendment, within such time has been included in sec 140 with retrospective effect which was not earlier mentioned in the original provision of Sec 140. By this amendment, the Government intended to nullify various High Courts judgements which allowed the benefit of the carry forward of the Input Tax Credit to the taxpayers. The Court were of the view that no time limit has been specified in the Act, hence this substantial right cannot be taken away. But by this retrospective amendment, the time limit has been inserted and hence the decision of High Courts does not hold good. 

In our opinion, this amendment will be challenged in Court of law and another round of litigation will be seen by us. It may happen that after this amendment, the department will challenge these decisions in Apex Court saying that time limit has been inserted, hence High Court decisions does not hold good. We will advise the taxpayers to file the declaration manually with the department by 30/06/2020 so that their claim is not barred.

In view of author, the department and Government should have allowed the taxpayer to carry forward this credit which is substantive right. GST was a new levy and it was not operational due to portal bottlenecks, hence, the taxpayers were not able to file the TRAN-1. But there was no alterative procedure, he should have filed it. He has not filed due to ignorance only. Hence, this simple mistake in initial stage of implementation of GST should have been condoned rather than dragging the poor taxpayers into unnecessary and costly litigation.

This is solely for educational purpose.

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