MUMBAI: The Patna excessive court, in a latest choice that favours the GST authorities, dominated that enter tax credit score (ITC) is akin to a privilege or a concession slightly than an inherent entitlement supplied throughout the GST framework. The eligibility to say ITC for a purchaser hinges not solely on the quantity collected by the seller (supplier) through the bill raised, but additionally on the well timed remittance of this sum by the seller to the federal government. The duty of proving that the tax collected has been remitted to the federal government rests with the client.
“This high court decision explicitly points out that a buyer is eligible to claim input tax credit (ITC) only if the GST has been actually paid by the seller (dealer). This will adversely impact genuine buyers, who have already paid the GST component against the invoice raised by the seller. If the seller defaults in payment of the tax to the government treasury, ITC cannot be claimed and in fact, if it has been claimed there will need to be a reversal of such credit,” Abhishek Jain, accomplice and oblique tax head at KPMG India, stated.
In the case of Aastha Enterprises, the HC stated that ITC by its very nomenclature contemplates a credit score being out there to the client in its credit score ledger by means of cost of tax by the provider to the federal government. “The rivalry of double taxation doesn’t impress us particularly because the declare is denied solely when the provider who collected tax from the purchaser fails to pay it to the federal government.
“This high court decision explicitly points out that a buyer is eligible to claim input tax credit (ITC) only if the GST has been actually paid by the seller (dealer). This will adversely impact genuine buyers, who have already paid the GST component against the invoice raised by the seller. If the seller defaults in payment of the tax to the government treasury, ITC cannot be claimed and in fact, if it has been claimed there will need to be a reversal of such credit,” Abhishek Jain, accomplice and oblique tax head at KPMG India, stated.
In the case of Aastha Enterprises, the HC stated that ITC by its very nomenclature contemplates a credit score being out there to the client in its credit score ledger by means of cost of tax by the provider to the federal government. “The rivalry of double taxation doesn’t impress us particularly because the declare is denied solely when the provider who collected tax from the purchaser fails to pay it to the federal government.
