#input tax credit

The Gujarat High Court ruled that acceptance of Form GST DRC-03A reducing principal liability to nil satisfies the Section 128A CGST Act payment condition for interest/penalty waiver, even if the original DRC-03 cited the wrong financial year. Technical errors in the initial voluntary payment form do not bar taxpayers from the amnesty scheme once the liability is extinguished.

Delhi HC held Section 122(1A) CGST Act applies to any person retaining benefit from fraudulent ITC, including non-taxable persons, and operates prospectively from 1 Jan 2021. The ruling quashes personal penalties on directors, clarifying the provision's scope and shielding taxpayers from retrospective liability.

The Delhi High Court held that input tax credit blocked under Rule 86A cannot be used to satisfy the mandatory pre-deposit under Section 107(6) for filing a GST appeal. The court granted the petitioner four weeks from the judgment date to file the appeal with interim protection from coercive recovery.

The Andhra Pradesh High Court has ruled that where ineligible Input Tax Credit was availed but not utilized, the tax authorities cannot impose interest under Section 50(3) or penalty under Section 74 of the CGST Act. This clarifies that mere availing of ineligible ITC, without actual benefit or misuse, does not trigger punitive liability - a critical safeguard for businesses facing retrospective tax demands.

Andhra Pradesh High Court rules that Input Tax Credit (ITC) claims for FY 2019-20 filed by 27.10.2020 remain valid under Section 16(5) of the GST Act, even if the extended deadline was 30.11.2021. The court quashed denial orders and recovery notices, reinforcing that taxpayers cannot be penalized for adhering to the original filing timeline.

Madras HC clarifies that GST registration cancellation requires evidence of fraudulent financial nexus, not merely shared premises. The ruling protects businesses from arbitrary cancellations where Input Tax Credit claims lack physical movement proof but no fraud is established.

Karnataka High Court quashes a GST order for violating principles of natural justice by ignoring the assessee's reconciliation documents (Annexure-1). The court remands the case for fresh adjudication, mandating consideration of submitted evidence, reinforcing that procedural fairness is non-negotiable in tax disputes.

CESTAT ruled that manufacturers who do not avail CENVAT credit on inputs used for non-excisable goods are not liable to pay 5-6% of their value under Rule 6(3) of the CENVAT Credit Rules. The decision clarifies that non-excisable goods do not qualify as 'exempted goods' unless explicitly defined, offering relief to manufacturers dealing with by-products.

Uttarakhand High Court rules that GST registration revocation must be reconsidered if a taxpayer deposits wrongly availed Input Tax Credit (ITC) with proof. The tax authority is directed to decide afresh within four weeks of representation, ensuring procedural fairness in GST compliance.

Madras High Court ruled that Input Service Distributors cannot distribute Input Tax Credit merely upon invoice receipt but must first satisfy all conditions under Section 16(2) of the CGST Act. The judgment invalidates Rule 39(1)(a) to the extent it mandates same-month distribution, protecting businesses from forced allocation of ineligible credit and ensuring compliance with statutory entitlement.

Bombay High Court holds that Section 122(1A) CGST Act applies only to taxable persons who retain benefit of fraudulent transactions; employees cannot be penalized vicariously.

The CETAT holds that Cenvat credit is permissible on capital goods used for providing taxable services, not just manufacture, clarifying eligibility for storage tanks and fabrication inputs.

Uttarakhand High Court holds that rejection of GST rectification application on limitation grounds is invalid when petitioner has deposited disputed dues, mandating merits-based adjudication.

Madras High Court holds that GST registration cancellation for non-filing due to genuine financial hardship must be remediable, not punitive, subject to compliance conditions.

Andhra Pradesh High Court rules that government undertakings selling essential commodities at subsidized rates are entitled to full Input Tax Credit under APVAT Act, 2005.