Case Title | Nuvoco Vistas Corporation Ltd. Vs. The Union of India and Ors |
Court | Bombay High Court |
Honourable judges | Justice A. S. Doctor Justice K. R. Shriram |
Citation | 2022 (11) GSTPanacea 652 HC Bombay WRIT PETITION NO.437 OF 2020 |
Judgemant date | 17-November-2022 |
The present petition has been filed to address the procedural difficulties and objections related to the distribution and eligibility of Input Service Distributor (ISD) credit of Service Tax under Section 140 of the CGST Act 2017. The petitioner argues that while attempting to distribute the transitioned credit through the ISD registration to their respective units or offices, they encountered significant procedural and functional challenges with the GST forms and portal, preventing them from effectively recognizing and reporting the distribution.
The respondent, however, raises several objections: First, they contend that the petitioner incorrectly migrated the erstwhile ISD registration to the GST regime and transitioned the credit, which is not permitted under the CGST Act, 2017. Second, they argue that the ISD registration under GST does not hold the status of an assessee who has obtained registration for conducting business activities under GST. Third, they assert that ISDs registered under GST are not eligible for Input Tax Credit (ITC) under Section 16 because they do not use the inputs in the course of or for the furtherance of business to make taxable supplies. Consequently, the credit cannot be transitioned directly into the Electronic Credit Ledger (ECL) maintained under the GST regime. Lastly, the respondent claims that the petitioner has incorrectly equated the erstwhile ISD with a regular Service Tax assessee, misinterpreting Section 140 (Transitional arrangements for input tax credit) of the CGST Act alongside Rule 39 (Procedure for distribution of input tax credit by Input Service Distributor) of the CGST Rules.
In response to similar issues faced by other petitioners, this Court, in its order dated 23rd August 2022, in the case of Unichem Laboratories Limited v. Union of India & Ors. (Writ Petition No.109 of 2020) and through a separate order in Apar Industries Limited v. Union of India & Ors. (Writ Petition No.11539 of 2019) dated 23rd August 2022, granted appropriate reliefs. These cases, which involved similar challenges regarding the transition and distribution of ISD credit, set a precedent that may influence the current petition. The Court’s previous decisions provided significant relief to the petitioners who faced comparable procedural obstacles in transitioning and distributing ISD credit under the GST regime.