GST
TRT-2025-
Bombay High Court
Date:-29-08-22
In:-
Issue Favourable to Tax Payer ?:-
Order Date: 29 August 2022
Facts-
- The Petitioner, Colgate Palmolive Limited, had filed the declaration in Form GST TRAN-1 for transitioning the credit of Rs. 13,69,01,936 under Section 140 of the CGST Act, since filing declaration in Form GST TRAN-1 was the only route for transitioning of the accumulated CENVAT credit balance in the ISD registration under the erstwhile service tax regime.
- The transition of the aforesaid CENVAT credit was permitted and the said balance of Rs. 13,69,01,936 got credited to the Electronic Credit Ledger of the ISD registration on the GST common portal.
- Petitioner issued the invoices to transfer the transitional credit from its ISD registration to its other units. Basis the said invoices, the respective units availed the input tax credit in its Electronic Credit Ledger by disclosing the said amounts transferred by the ISD registration in its return filed in Form GSTR – 3B.
- Majority of the recipient units of Petitioner to whom the credit was transitioned, have been issued identical Show Cause Notices inter-alia alleging that (i) the ISD unit of Petitioner has erroneously transitioned the credit from the erstwhile regime to the GST regime; and (ii) the credit distributed by the ISD unit of Petitioner has been wrongly availed and utilized by the recipient units for payment of output GST liability of the recipient unit.
- Aggrieved, the petitioner filed a petition.
Issue-
- Whether objections raised by respondents with regard to transition and distribution of CENVAT Credit by Input Service Distributor (ISD) of the balance of Service Tax/ Excise Duty are sustainable?
Order-
- The Division Bench of Hon’ble High Court observed that the procedural issues have arisen due to the fact that the GST was at the nascent stage of its implementation and there was a prevalent ambiguity with regard to the transitional provisions.
- They relied on the Hon’ble Apex Court case Union of India & Another Vs Filco Trade Centre Pvt. Ltd. & Another, in which it was held that GSTN has to ensure that there are no technical glitch during filing and directed Respondents to open the common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months, i.e., w.e.f. 01.09.2022 to 31.10.2022.
- Accordingly, Petitioner’s recipient units can file revised declarations in Form GST TRAN 1, either electronically or manually, for taking the credit already distributed to them by the ISD unit of Petitioner by issuing invoices. However, no further credit based on revised declaration in FormTRAN-1 shall be claimed by Petitioner, as the said filing is purely for regularizing the earlier action of transition and distribution of Cenvat credit by the ISD registration of Petitioner.
- Once, the credit taken by the respective units is regularized by filing revised electronic or manual declaration (as the case maybe) in Form GST TRAN – 1, the credit balance shown (if any) in Electronic Credit Ledger of the ISD unit of Petitioner shall be deemed to have lapsed/ deleted.
- Accordingly the petition was disposed of.
Download Case Law
