Apex Court allows the carry forward of transitional credit; directs re-opening of GSTN portal for filing Form TRAN-1 and TRAN-2

Hon’ble SC in case of Union of India vs Filco Trade Center Private Limited [TS-369-SC-2022-GST] provides a big relief to the taxpayers who could not carry forward Transitional credit into their electronic credit ledger within the time limit allowed by the government. There are various HC rulings wherein the relief was granted to the assessees to carry forward transitional credit even after the due date of filing of transitional forms.

Hon’ble SC taking the cognizance of the various HC rulings passed the following order:

(i) GSTN is directed to open common portal for filing concerned forms for availing Transitional Credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 01.09.2022 to 31.10.2022.

(ii) The relief is granted to any aggrieved registered assessee irrespective of whether the taxpayer has filed writ petition before the High Court or whether the case of the taxpayer has been decided by Information Technology Grievance Redressal Committee (ITGRC)

(iii) The concerned officers are given 90 days thereafter to verify the veracity of the claim/transitional credit and pass appropriate orders thereon on merits after granting appropriate reasonable opportunity to the parties. Thereafter, the allowed Transitional credit is to be reflected in the Electronic Credit Ledger.

(iv) GSTN has to ensure that there are no technical glitch during the said time.

(v) If required GST Council may also issue appropriate guidelines to the field formations in scrutinizing the claims.

Our remarks: This decision of the Hon’ble SC is a welcome decision for all the assessees who could not carry forward the transitional credit into the GST regime. Hon’ble SC has granted relief to all the assessees whether they filed writ petition to HC or whether the case of the taxpayer has been decided by ITGRC. All the aggrieved persons shall avail the benefit of the decision as per the direction of the SC. The government is expected to bring easy procedure and guidelines to implement the decision of the Hon’ble SC.