2025-VIL-1267-DEL
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SGST High Court Cases

GST - Transitional Input Tax Credit for Input Service Distributor (ISD) - Whether the petitioner, as an ISD, was entitled to carry forward the transitional ITC under Section 140(7) of the CGST Act, 2017 – HELD - A perusal of Section 140(7) of the CGST Act would show that the ITC which was available on account of any services received prior to the appointed date by the ISD shall be eligible for distribution as credit within the time and manner as may be prescribed - While the CGST Act provided for distribution of ITC by an ISD, the specific timeline for such distribution was not prescribed. The court relied on the Bombay High Court's orders in Siemens Ltd. v. Union of India, which had directed the GST Council to consider the effect of Section 140(7) on the transition of ITC for ISDs. The petitioner could not be deprived of the legitimate ITC due to technical glitches in the GST portal – In the present case, due to a glitch in the GST portal, the Petitioner could not file the form TRAN-01 and since the form could not be filed in time, the distribution could not take place as per Rule 39(1)(a) of the CGST Rules within one month. Hence, the Petitioner cannot be deprived of the benefit of the ITC due to mere technical glitches or transitional creases which were ironed out subsequently - The Department is directed to reflect the amount on the Electronic Credit Ledger (ECL) of the petitioner within three months. If the reflection of the credit on the ECL requires the cooperation of the GST Network (GSTN), the GSTN shall also give effect to the order within the same timeline. Once the amount is reflected on the ECL, the petitioner shall have one month to distribute the credit to its sub-offices - The writ petition is disposed of
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