Srinivasa Pharmacy Vs Superintendent of GST and Central Excise Karur II Range (Madras High Court)
Future of Litigation on ITC post recent amendments with analysis of Madras High Court Ruling in Srinivasa Pharmacy v. Superintendent of GST & Central Excise
Input Tax Credit (ITC) remains as one of the most commonly litigated areas under GST regime with various disputes relating to time limitation, procedural compliance, supplier defaults and return filing mismatches and daily fresh notices are being issued to tax payers on these topics.
The decision of the Madras High Court in Srinivasa Pharmacy (refer citation at footnotes) assumes importance in the evolving jurisprudence on ITC, particularly in light of recent retrospective amendments to Section 16 of the CGST Act, 2017 and judicial emphasis on the substantive compliance over procedural rigidity.
This article is aimed to analyze the legal principles emerging from this ruling and evaluates its implications on taxpayers, practitioners, and tax administrators.
Legislative Background of Section 16 and Time Limits for availing ITC
Section 16 of the CGST Act, 2017 prescribes eligibility conditions for availing ITC and historically, Section 16(4) imposed strict time limitations for claiming ITC. However, with the subsequent legislative developments and insertion of Section 16(5) through Finance Act (No.2), 2024, has provided retrospective relaxation for certain financial years. This amendment extended the time limit for claiming ITC pertaining to FY 2017-18 to FY 2020-21 up to returns filed till 30th November, 2021.
