2018 (10) TMI 999 - HC - GST

Transitional Credit/input tax credit - migration to GST Regime - difficulty in reflection of Tran-I credit in GSTR-3 - Held that - It is highlighted that the reflection of Tran-I credit in GSTR-3 is essential as it would ultimately impact the availability of credit for the entire duration - both transitional credit and input credit for the period 01.07.2017 onwards - Learned counsel submits that unless appropriate directions are given to the respondents, it is likely to face severe adverse financial crisis because in the absence of credit, it would have to pay cash throughout the country to the tune of ₹ 37 crores. As the deadline for completing this form and availing the credit is 20.10.2018, the respondents are hereby directed to permit the petitioners to fill the GSTR-3 form manually in a manner, as to permit it to claim a credit, subject to the final outcome of the proceedings - It is clarified that in the GSTR-3B form, the petitioner can claim transitional as well as the post 01.07.2017 input tax credit. List on 23.01.2019.

Summary

Issues:
1. Non-reflection of credits in electronic credit ledger account.
2. Discrepancy in Tran-I credit and GSTR-3 form.
3. Impact on availability of credit and financial crisis.
4. Permission to fill GSTR-3 form manually.

Analysis:
The High Court addressed the petitioners' grievances regarding the non-reflection of credits in their electronic credit ledger account. The issue involved two aspects: transitional credit before 30.06.2017 and post-01.07.2017 credit. The petitioners relied on Tran-I, which revealed a credit of ?7.54 crores for their Delhi office as of 27.12.2017. The matter was referred to the Grievance Redressal Forum of the GST Council, which acknowledged the petitioners' grievance in a meeting on 21.08.2018.

The court emphasized the importance of reflecting Tran-I credit in the GSTR-3 form, as it impacts the availability of credit for both transitional and post-01.07.2017 periods. Failure to address this issue could lead to a severe financial crisis for the petitioners, requiring them to make cash payments amounting to ?37 crores nationwide. In light of this, the court directed the respondents to allow the petitioners to manually fill the GSTR-3 form to claim the credit, pending the final outcome of the proceedings.

Regarding the GSTR-3B form, which deals with eligible Input Tax Credit (ITC), the court noted the importance of completing the form by the deadline of 20.10.2018. The respondents were instructed to permit the petitioners to fill the form manually to claim transitional as well as post-01.07.2017 input tax credit. This directive aimed to ensure that the petitioners could avail of the credit without facing undue financial burdens. The case was scheduled for further proceedings on 23.01.2019, with instructions for the order to be provided under the signatures of the Court Master.