GST: Two Options for the Dealer Either Select ITC Refund or Carry Forward

The Madras High court ruled, the dealer holds with 2 choices: refund or carry forward the Input tax credit to the GST regime.

A single bench of Justice M. Sundar, the dealer could not be forced to choose one of the two i.e refunds or carry forward Input tax credit to the GST regime. The same would be post-furnishing all, options provided to the dealer. Department has furnished the provisional refund order, and the dealer’s entitlement is described as the issuance of “Form-P”.

Read Also: Tax Refund Not Acceptable for Non-Reversal of GST ITC U/S 54(3)

The applicant firm was an enrolled dealer beneath the erstwhile. “Tamil Nadu Value Added Tax Act, 2006.” After the GST act came into force on 1st July 2017, the former TNVAT act was considered. Dealers holding ITC would have the choice of either asking for a refund or taking the input tax credit forward to the GST regime. The writ applicant has chosen for refund. Inside the option, there would be a technical issue.

The case would proceed to the Supreme court in the Filco Trade case. The council was navigated by the order of the Apex court to open the common portal to claim the transitional credit via TRAN-1 and TRAN-2 Forms for 2 months that comes into force from 1st Sept 2022 to 31st Oct 2022, which was prolonged to 2024.

The urge of the applicant for the refund was processed including that the respondent would incur a provisional refund order. The council would provide Form-P in the form of a provisional refund order, mentioning that the writ petitioner was due a refund as per the GST input tax credit in the AY 2017-18. Till now the writ petitioner has not obtained the refund. The respondent would furnish the order asking for the writ petitioner to choose for taking forward the input tax credit beneath the GST regime.

The applicant argued, 2 choices were there, carry forward or refund, when the writ petitioner would choose the refund, the order would not stands to be issued, precisely for the provisional refund order would be furnished post processing the application of the refund.

The council would furnish that the dealer specified that he had wrongly reversed the GST ITC in June 2017, and the same would be directed to the issuance of the notice.

The petitioner had previously chosen a refund, it had been processed by the department, and a provisional refund order had also been given with the FORM-P, which is a procedural need for a refund. As a result, the court invalidated the notice.

Case Title	Easwaran Brothers India Pvt. Ltd. Vs Assistant Commissioner (ST) (FAC)
Citation	W.P.No.33593 of 2022
Date	15.12.2022
Counsel For Petitioner	Advocate Adithya Reddy
Counsel For Respondent	Government Advocate (Taxes) Amirta Dinakaran
Madras HC	Read Order