SC directs fresh window for availing transition tax credits from pre-GST days

Taxpayers who had missed out on getting the benefit of transitional tax credits during India’s switchover to the Goods and Services Tax (GST) regime five years ago, will now get a fresh window to avail them, with the Supreme Court on Friday directing the country’s revenue authorities to facilitate such credits.

The move is likely to benefit hundreds of GST assessees who had hitherto not been able to avail such credits, with a two-month window to claim them set to become available over September and October.

‘Allow fresh filing’

The apex court has directed the government to allow fresh filing of Tran 1 and Tran 2 forms, which were brought in under the GST system initially to allow assessees to carry forward pre-GST credits to the new indirect tax regime.

“The Supreme Court has directed that the GSTN (GST Network) portal must open a common portal for all assesses to claim transitional credit for 60 days from September 1 till October 30,” said Abhishek Rastogi, partner at Khaitan and Co., who represented taxpayers’ challenge in the matter. “All assesses that were affected can claim benefit whether they have filed a writ petition on the issue or not,” Mr. Rastogi added.

Abhishek Jain, tax partner at KPMG India, said the court’s decision was significant as various tax payers had contested that these transition forms could not be filed in a timely manner on account of technical glitches, and that even otherwise their right to transition the credit could not be denied to them.

‘Verify on merits’

“The GSTN has been asked to make sure there are no technical glitches during this time, and officers have been given 90 days to verify the claim of credit on merits and pass appropriate orders, and grant hearing opportunities to taxpayers,” said Mr. Rastogi.

“This is a golden opportunity for the industry players irrespective of whether they were a party to the writ petition or not, and all businesses should look at any pre-GST credit that was not duly transitioned, in light of this landmark SC verdict,” KPMG India’s Mr. Jain said.