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Delhi HC allows all GST assessees to claim due transitional credit till June 30

Delhi HC allows all GST assessees to claim due transitional credit till June 30

In what could be seen as a big relief for businesses, the Delhi High Court on Tuesday ruled that time limit for transitional credit is only ‘directory’ and not ‘mandatory’. Experts say this is a landmark judgment as the ruling will not only benefit the petitioner but all the affected assessees who are not even party to the petition. This would mean all assessees can claim all pending transitional credit (technically known as input tax credit or ITC) till June 30.
Transitional credit refers to use of tax credit accumulated up to June 30, 2017, that is, last day of erstwhile central excise and service tax regime. Post-introduction of Goods & Services Tax (GST), special provision was made for credit accumulated under VAT, excise duty or service tax to be transited to GST. Barring registered dealers opting for composition scheme, all other assessees were given the opportunity to avail themselves of the transitional credit.
However, there were some conditions. The credit will be available only if returns for the last six months — from January 2017 to June 2017 — were filed in the previous regime ( VAT, excise and service tax returns had been filed). And Form TRAN I (to be filed by registered persons under GST, may be registered or unregistered under the old regime) has to be filed by December 27, 2017, to carry forward the input tax credit.

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