M/S. Siemens Limited vs. Union Of INDIA Through The Jt. Secretary (Revenue) And Ors.
Held
The High Court decided to adopt the approach taken by the Hon'ble Apex Court in the case of Union of India & Another Vs Filco Trade Centre Pvt. Ltd. & Another. The Court directed that all Petitioners, through their respective units/offices registered under CGST Act and/or State Acts, can avail the window to file GST TRAN-1/revised GST TRAN-1 at the units/offices between September 1, 2022, to October 31, 2022. Such filings will be based on manual ISD invoices issued/to be issued by the ISD of the Petitioner, subject to the aggregate credit not exceeding the ISD credit available with the ISD Petitioner. The Court also directed the Central Board of Indirect Taxes and Customs (CBIC) to issue a clarification regarding the distribution/reporting of ISD credit, keeping in mind the problems faced by various parties and the approach adopted by the Supreme Court. Concerned officers are given 90 days thereafter to verify the veracity of the claim and pass appropriate orders on merits after granting an opportunity to the parties. The ratio decidendi is that procedural and technical difficulties should not bar genuine claims for transitional credit, and the Supreme Court's directive in Filco Trade Centre provides a framework for resolving such issues.
Facts
A batch of writ petitions was filed by Siemens Ltd, Cummins India Limited, and Procter & Gamble Health Limited challenging procedural difficulties in distributing and utilizing Input Service Distributor (ISD) credit of Service Tax/excise duty under Section 140 of the CGST Act, 2017. The revenue contended that ISD credit could not be transitioned directly into the Electronic Credit Ledger (ECL) under the GST regime. Petitioners argued they faced procedural and functional difficulties with GST forms and the portal when attempting to distribute credit from the ISD registration to their units/offices. The Supreme Court, in Union of India & Another Vs Filco Trade Centre Pvt. Ltd. & Another, had directed the GST Network to open the common portal for filing/rectifying TRAN-1 and TRAN-2 for a period of two months.
Key Issues
1. Whether Input Service Distributor (ISD) credit of Service Tax/excise duty can be transitioned directly into the Electronic Credit Ledger (ECL) under the GST regime, as per Section 140 of the CGST Act, 2017, or if it ought to have been distributed by the ISD to its units/offices before July 1, 2017, for those units to file TRAN-1. Petitioner's contention: Petitioners faced procedural and functional difficulties with GST forms and the portal, preventing them from distributing and reporting the credit transition. They relied on the Supreme Court's order in Filco Trade Centre Pvt. Ltd. to overcome these technical hurdles. Revenue's contention: ISD credit must be distributed by the ISD to its units/offices before July 1, 2017, and then the transferee units/offices must file TRAN-1 to transition the credit into their respective ECLs. Direct transition of ISD credit into the ECL is not permissible.
Sections Cited
Section 140
AI-generated summary — verify with the full judgment below
902-903-904-909-910-wp-986-19-wp-8334-19-wp-109-20-wp-2786-21.doc varsha IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 986 of 2019 WITH INTERIM APPLICATION NO. 3665 OF 2020 IN WRIT PETITION NO. 986 OF 2019 Siemens Ltd .....Petitioner V/s.
Union of India through the Joint Secretary (Revenue) and Ors .....Respondents ----------- Mr. Vikram Nankani, Senior Advocate a/w Mr. Jitendra Motwani, Mr Nishant Shah i/b Economic Laws Practices Advocate for the Petitioner.
Smt. S.D. Vyas, B-Panel Counsel, for the Respondent-State.
Mr. Pradeep S. Jetly, Senior Advocate, a/w Mr. Jitendra Mishra, Mr D.B.
Deshmukh, Ms Sangeeta Yadav, Mr Sham Walve for Respondents. ----------- WITH WRIT PETITION NO. 8334 of 2019 WITH WRIT PETITION NO. 4979 OF 2019 Cummins India Limited .....Petitioner V/s.
Union of India through the Joint Secretary (Revenue) and Ors .....Respondents ----------- Mr. Jitendra Motwani a/w Ms. Virangana Wadhawan, Mr Neeraj Hande, Mr Nishant Shah i/b Economic Laws Practice for Petitioners Advocate for the 1/7
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