Whether the credit reflected in the electronic credit ledger of the assessee amounts to either availment or utilization of the credit?


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	Blog Categories 1. GST (3) 2. Income Tax (0) 3. ROC (0) 4. Auditing (0) 5. Misc. / Other Articles (0) Articles > 1. GST Whether the credit reflected in the electronic credit ledger of the assessee amounts to either availment or utilization of the credit? Category: 1. GST, Posted on: 15/11/2022 , Posted By: Mr. Sushil Kumar Antal Visitor Count:1648 Issue:- A New Car has been purchased in April, 22 and the Input Tax Credit for that month has been taken. We know that expenditure on car purchase shall be covered under Blocked credit, and the GST paid on the purchase of a car will not be allowed to set off against output tax liability. Now auditor is asking to reverse the ITC with 18% interest. Submission: - It is submitted that no doubt we have to reverse the Input Tax Credit and we shall be liable to pay interest only in case where ITC has been utilised. The following issue was involved in the matter of Commercial Steel Engineering Corporation vs. State of Bihar ‘Whether the credit reflected in the electronic credit ledger of the assessee amounts to either availment or utilization of the credit? In the aforesaid matter the Hon’ble Patna HC vide Civil Writ Jurisdiction Case No. 2125 of 2019 quashes proceedings-initiated u/s 73 of Bihar GST Act, 2017 (‘BGST Act’) in respect of recovery of ineligible credit transitioned but not utilized, 2 rejects Revenue’s plea that act of reflection on the electronic credit ledger is a confirmation of a wrong availment, liable for proceeding. The HC found that it would be stretching the term ‘availment’ beyond prudence to treat the mere reflection of the transitional credit in the electronic credit ledger as an act of availment, for drawing a proceeding under Section 73(1) of the BGST Act. The legislative intent reflected from a purposeful reading of the provisions underlying Section 140 alongside the provisions of Section 73 and Rules 117 and 121 is that even a wrongly reflected transitional credit in an electronic ledger on its own is not sufficient to draw penal proceedings until the same or any portion thereof, is put to use so as to become recoverable. ******************** Adv. Sushil Kumar Antal [LLM, CS, CA(F), MBA(FIN), MCOM] Past Chairman, Modinagar Chapter of NIRC of ICSI (2019-20), Mob.: +91-97113 36333, Email: sushilantal@gmail.com Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the author whatsoever and the content is to be used strictly for informational and educational purposes. While due care has been taken in preparing this article, certain mistakes and omissions may creep in. the author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon Disclaimer: The content of the blog does not create any responsibility of the firm / its authorized persons whose website is being accessed. The blog is not for legal use. Kindly verify the correctness of data/contents from your own sources. This is only for information purpose. Add a Comment Name: Your Comment: View Comments** (0)

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