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In a  major relief to tax payers who could not claim their pre-GST/Transitional credits, the Supreme Court in case of Union of India vs. M/s Filco Trade Centre Pvt. Ltd. and Anr has directed the GST network to open a two month window on GST portal for claiming the transitional credits by way of filing Tran-1 and Tran-2.

Credit worth hundreds of crores are stuck due to pending Writs. The Apex court by passing this judgement has ensured that the vested right of taxpayers flows to them in forms of pre-GST credit irrespective of whether they were party to any writ or redressal committee.

The judgement and it’s impact has been summarised below :

Who can benefit from this ruling?

  • Registered persons who could not claim pre-GST credits in Tran-1/Tran-2.
  • Registered persons who could not claim and whose appeal with redressal committee was rejected.
  • Registered persons who claimed incorrect credit in transitional form but could not revise.

What is the Supreme Court ruling?

The Apex court in case of Union of India vs. M/s Filco Trade Centre Pvt. Ltd. and Anr has directed the GST network to :

  • Open the GST portal for filing of Tran-1/Tran-2 for two months starting 01/09/2022 to 30/10/2022.
  • Aggrieved taxpayers can file fresh or revised forms within the mentioned period of 60 days
  • Supreme court has directed the GST network to ensure there are no technical glitches.
  • The GST officers are granted a further period of 90 days to verify the forms before allowing the credit. The Transitional credit once allowed will reflect in electronic credit ledger.
  • Supreme court has directed the GST council to make appropriate guidelines in this regard.

 Steps for Aggrieved Tax Payers in light of this judgement

  • Prepare and keep ready a invoice wise listing of pre-GST credits.
  • Reconcile the pre-GST credits with books of accounts.
  • There is lack of clarity for registered persons who have already reversed their transitional credits and discharged the same with interest. It is advised they should quantify the same and keep a backup working ready.

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Practicing Chartered Accountant specializing in Taxation and Business Consulting. Actively advising corporates and multi national clients on matters of Business, Finance and Taxation. View Full Profile

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April 2024