The Delhi High Court has given relief to those asking for tax credits on pre-GST stocks lying for more than 12 months. Importers of fast-moving consumer goods, among others, are going to benefit from the interim order.
The order is important because the deadline for filing TRAN 1, the form for claiming tax credits on pre-GST stocks, is December 27.
In the pre-goods and services tax (GST) regime, importers used to get tax credits on the payment of countervailing duties. However, these benefits were allowed for pre-GST stocks only if inventories were there for 12 months prior to the roll-out of the GST. The new indirect tax system was rolled out on July 1.
Abhishek Rastogi of Khaitan & Co said companies contested this, arguing that those who did not have invoices were given the credit in the range of 40-60 per cent without specifying the time limit. In that sense, there was unfair advantage for those who did not have invoices, while those who possessed receipts were restricted by the time-limit, he said.
The companies also disputed the policy on the grounds of promissory estoppel, which means that promise made by the sovereign will be valid for subsequent period unless public interests are involved.
The court gave interim relief to companies pending final order.
via HC relief for companies on pre-GST credit | Business Standard News
