Re-opening of Transitional ITC Claims Window: Centre Seeks SC Additional 30 Days

In July 2022, the Supreme Court gave a landmark verdict allowing the pre-Goods and Services Tax (GST) credit. It also clarified that the department has to open a window to allow the taxpayers to claim transition Input Tax Credit (ITC) for 60 days from 1st September 2022 till 30th October 2022.

Also, the Apex Court directed GST Network (GSTN) that maintains the GST portal to make changes in the system to allow transitional ITC claims.

Now, the Centre submitted an application to the Apex Court seeking an extension for re-opening the transitional ITC window. Also, it submitted that they would keep the facility for 90 days from October to December 2022. 

The government further cited the technical reasons and difficulties in making system changes due to the monthly return filings. It also mentioned that they want to avoid difficulties for the taxpayers and ensure the smooth functioning of the portal without affecting the regular return filing process.

Earlier, various High Courts have expressed a similar view and directed the government to re-open the window for claiming transitional ITC. The GST-registered taxpayers must file the form TRANS-2 to carry forward the tax credits availed under the pre-GST regime.

Initial data indicates that around Rs.500 crore of transition ITC was blocked and stuck with the taxpayers. Also, around 7,000-10,000 aggrieved taxpayers could not pass transitional tax credits from the pre-GST era into the GST regime.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@clear.in