Transformative Learning Solutions Pvt Ltd Vs Commissioner Central Goods And Service Tax Delhi East & Anr. (Delhi High Court)
The Delhi High Court set aside an order dated January 31, 2025, passed by the Additional Commissioner of Central Goods & Service Tax, which had confirmed a massive demand of ₹20,14,98,627 (approximately ₹20.15 crore) along with equivalent interest and penalty, against Transformative Learning Solutions Private Limited. The company, engaged in exporting Ayurvedic cosmetic goods, had its Input Tax Credit (ITC) claim rejected primarily on reconciliation grounds.
The Central Dispute
The majority of the confirmed tax demand stemmed from an objection raised during an audit for the period 2017-18 to 2021-22. The CGST Department alleged that the petitioner failed to submit adequate proof of foreign remittance—specifically BRC/FIRC (Foreign Inward Remittance Certificate)—to corroborate its export transactions.
The Department argued that the lump-sum amounts credited in INR from the petitioner’s foreign branch, as seen in bank statements, did not corroborate with the invoice-wise/month-wise/year-wise export quantum. The Department rejected the refund claim, citing that the huge number of FIRCs and invoices could not be reconciled.
High Court’s Key Clarification and Holding
The Delhi High Court, after hearing the submissions, delivered a crucial clarification on the reconciliation requirement for export benefits:
