Sutherland Global Services Private Limited VS Assistant Commissioner CGST and Ors

The petitioner, a company providing Information Technology enabled services globally, seeks a writ of Certiorari to nullify a letter dated 14.02.2018 issued by the Assessing Officer. This letter prevents the petitioner from utilizing accumulated credits related to Education Cess (EC), Secondary and Higher Education Cess (SHEC), and Krishi Kalyan Cess (KKC). The petitioner operates under the Central Goods and Service Tax Act, 2017, with eight units registered under the Act: five in Special Economic Zones (SEZ), two in Software Technology Parks of India (STPI), and one in a Domestic Tariff Area (DTA).

Before the implementation of Goods and Service Tax (GST), the petitioner was assessed for service tax and utilized CENVAT credit on inputs, capital goods, and input services to offset their service tax liability. Parliament introduced the levy of Education Cess through the Finance Act 2004 and Secondary and Higher Education Cess through the Finance Act 2007. The CENVAT Credit Rules 2004 allowed manufacturers to claim credits on these cesses. However, the Assessing Officer’s letter prevents the petitioner from utilizing these accumulated credits, prompting the petition for a writ of Certiorari.

The petitioner in this case seeks a writ of Certiorari to invalidate a letter issued by the Assessing Officer on February 14, 2018. The petitioner, a company providing Information Technology enabled services, is registered under the Central Goods and Service Tax Act, 2017, with several units in different zones. Prior to the implementation of GST, the petitioner availed CENVAT credit on various taxes.

The introduction of Education Cess (EC), Secondary and Higher Education Cess (SHEC), and Krishi Kalyan Cess (KKC) allowed for such credits to be utilized against tax liabilities. However, with the abolition of EC and SHEC on taxable services in 2015, the accumulated credits remained unutilized. Subsequently, KKC was levied from June 1, 2016, onwards, and the petitioner sought to utilize the accumulated credits against this liability.

Following the implementation of the Central Goods and Services Tax Act (CGST) in July 2017, the petitioner attempted to utilize the accumulated credits against its tax liabilities. The Assessing Officer requested various documents to support the petitioner’s claim.

In summary, the petitioner contends that it is entitled to utilize the accumulated credits of EC, SHEC, and KKC against its tax liabilities under the CGST Act. The petitioner seeks to quash the letter from the Assessing Officer, which prevents it from availing these credits.

The petitioner is seeking a writ of Certiorari to invalidate a letter issued by the Assessing Officer dated February 14, 2018. The letter denied the petitioner the ability to utilize accumulated credit for Education Cess (EC), Secondary and Higher Education Cess (SHEC), and Krishi Kalyan Cess (KKC). The petitioner, a company providing Information Technology enabled services globally, is registered under the Central Goods and Service Tax Act, 2017, with various units in Special Economic Zones (SEZ), Software Technology Parks of India (STPI), and Domestic Tariff Areas (DTA).

Before the implementation of Goods and Service Tax (GST), the petitioner utilized CENVAT credit on inputs, capital goods, and input services against their service tax liability. However, with the introduction of GST, Education Cess and SHEC were abolished effective from June 1, 2017, leaving accumulated credits unused. Subsequently, KKC was levied from June 1, 2016, allowing the utilization of CENVAT credit against KKC liability.

Upon the enactment of the Central Goods and Services Tax Act (CGST) on July 1, 2017, the petitioner sought to utilize accumulated credit against their tax liability. However, the Assessing Officer rejected this request on the grounds that the specific duties and taxes enumerated in the Explanation to Section 140(1) of the Act did not cover cesses such as EC, SHEC, and KKC.

The petitioner challenges this decision, focusing on the interpretation of Section 140 of the Act, which provides transitional arrangements for input tax credit. The petitioner argues that they are entitled to carry forward and utilize the accumulated credit under this provision.

In summary, the petitioner seeks to quash the Assessing Officer’s decision and asserts their entitlement to avail and utilize accumulated credit for EC, SHEC, and KKC under Section 140 of the Act.

The petitioner, a company providing Information Technology enabled services, seeks relief through a writ of Certiorari to annul a letter issued by the Assessing Officer on February 14, 2018. The petitioner aims to utilize accumulated credits for Education Cess (EC), Secondary and Higher Education Cess (SHEC), and Krishi Kalyan Cess (KKC). Registered under the Central Goods and Service Tax Act, 2017, the petitioner operates in various zones including Special Economic Zones (SEZ) and Domestic Tariff Area (DTA).

Before the introduction of the Goods and Service Tax (GST), the petitioner availed CENVAT credit on inputs, capital goods, and input services to offset service tax liability. However, with the abolishment of EC and SHEC on taxable services by the Finance Act 2015, accumulated credits remained unused.

Subsequently, the introduction of KKC via the Finance Act 2016 allowed for the availing of CENVAT credit, which the petitioner sought to utilize under the Central Goods and Services Tax Act (CGST) effective from July 1, 2017. The petitioner provided all requested details to the Assessing Officer but faced rejection of their credit carry-forward request on the grounds that the specific duties and taxes enumerated in the Explanation to Section 140(1) of the Act did not cover cesses such as EC, SHEC, and KKC.

The dispute revolves around the interpretation of Section 140 of the Act, which deals with transitional arrangements for input tax credit. The petitioner contends that they should be entitled to carry forward and utilize accumulated credits under this provision.

Section 140(1) allows registered persons to take forward CENVAT credit carried in returns under the previous law, subject to certain conditions. The petitioner argues that since the credits were admissible under the previous law and not explicitly disallowed under the new law, they should be eligible for carry forward.

The petitioner seeks relief from the court to quash the Assessing Officer’s decision and allow for the utilization of accumulated credits in accordance with Section 140 of the Act.

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