Central Board of Indirect Taxes and Customs has issued an important instruction regarding matters related to Transitional Credit under the GST Law. This instruction addresses the filing of Special Leave Petitions (SLPs), policy developments, and the examination of High Court orders. This article aims to analyze the instruction and provide an overview of the guidelines.
Analysis: The instruction highlights that the Board has been filing SLPs on availing Transitional Credit under GST due to IT glitches, based on previous opinions and instructions. More than 500 SLPs have been processed by the Legal Cell, and numerous Writ Petitions on similar issues are pending before various High Courts. The instruction refers to orders issued by the Hon’ble Supreme Court and the GST Policy Wing’s guidelines in response to these issues.
Conclusion: In light of the Supreme Court’s orders and policy developments, the Central Board of Indirect Taxes and Customs has made certain decisions. The Board will not file SLPs on availing Transitional Credit due to IT glitches in pending proposals. However, if any High Court order deviates from the existing scheme or involves questions of law concerning Section 140 of the CGST Act, remedial action can be taken after examination and consultation with the Government Standing Counsel. This instruction supersedes the earlier instruction issued in 2018.
F.No.276/222/2018-CX.8A
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Indirect Taxes 86 Customs)
Legal Cell
*****
C Wing, 5th Floor, HUDCO-VISHALA Building
Bhikaji Cama Place, R.K. Puram,
New Delhi
Instruction No. F.No.276/222/2018-CX.8A Dated: 10.07.2023
To,
All Principal Chief Commissioners/Chief Commissioners of Central Tax and Customs
All Principal Director General/Director Generals of Central Tax and Customs < webmaster.cbec@icegate.gov.in >
Subject: Matters relating to Transitional Credit under the GST Law – Reg.
Sir/Madam,
Board has been filing SLPs on the issue of availing the Transitional Credit under GST due to IT glitches based on the earlier opinions of Ld. Law Officer(s) and Board’s instruction dated 13.11.2018 (copies available on CBIC website). In this regard more than 500 SLPs have been processed by Legal Cell and more than 400 SLPs have already been filed. It has been ascertained that a substantial number of Writ Petitions on the similar issues are also pending before various High Courts.
2. Under these circumstances, Hon’ble Supreme Court in the case titled Union of India v. Filco Trade Centre Pvt. Ltd. in SLP (C) No. 32709-32710/2018 and other connected matters passed the directions vide order dated 22.07.2022 (copy available on SC website). The same were modified vide order dated 02.09.2022 (copy available on SC website), wherein, it was clarified that all questions of law decided by the respective High Courts concerning Section 140 of the Central Goods and Services Tax Act, 2017 read with the corresponding Rule/ Notification or direction are kept open. Further, in accordance with these Orders, the GST Policy Wing has already issued the policy guidelines vide Circular No.180/12/2022-GST dated 09.09.2022 (copy available on CBIC website).
3. Subsequently, the Hon’ble Supreme Court, vide Order dated 04.11.2022, restored following 03 SLPs, which were earlier dismissed vide afore-mentioned Order dated 22.07.2022, as the issue involved in these 03 SLPs is not identical with other matters:
(i) SLP (C) No. 30204/2018 in the matter of JCB India Ltd v. Union of India; and
(ii) SLP (C) No. 32709-32710/2018 in the matter of Union of India v. Filco Trade Centre 85 Union of India v. Hitesh Engineering.
F.No.276/222/2018-CX.8A
The issues involved in the afore-said 3 SLPs is also related to constitutionality of condition (iv) enshrined under sub-section 3 of Section 140 of the CGST Act, 2017.
4. Based on the above factual matrix, it has been decided:
i. In terms of the Orders dated 22.07.2022 and 02.09.2022, and subsequent policy developments, Board would not be filing SLPs on the issue of availing the Transitional Credit due to IT glitches in the pending SLP proposals. Board shall be forwarding the communication for individual SLP proposals to respective Commissionerates.
ii. Even after Circular No.180/12/2022-GST dated 09.09.2022, if any order is passed by the Hon’ble High Court which is not in terms of extant scheme of things or where any question of law concerning Section 140 of the COST Act, 2017 read with the corresponding Rule/Notification or direction is directly involved, the same may be scrupulously examined by the field formations, and remedial action including filing of a Review Petition or a Writ Appeal, as the case may be, undertaken after consultation with the Government Standing Counsel. If Review Petition/ Writ Petition is not possible against such adverse order, a self-contained SLP proposal, in terms of extant instructions, may be forwarded to Board.
5. This Instruction is issued in supersession of the earlier Instruction dated 13.11.2018 issued vide F. No. 276/262/2015-CX.8A Pt.-III.
Your faithfully
(A Gupta)
(OSD Legal)
Tele:01 1- 26162152
Copy to:
1. Additional Secretary, GST Council, New Delhi for information.
2. CEO, Goods and Service Tax Network, New Delhi.
3. The Pr. Commissioner, Directorate of Legal Affairs, CBIC, New Delhi.
4. The Pr. Commissioner, GST Policy Wing, CBIC, New Delhi.
5. Shri M. K. Maroria, Advocate-on-Record, CAS, New Delhi.
