2018 (9) TMI 1476 - HC - GST

Tax Credit Migration Under GST: Rule 117 Supports Taxpayers' Transition with Flexible Declaration Timelines and Legal Remedies

HC addressed petitioner's challenges in migrating tax credits under GST regime. Court upheld Rule 117 of CGST Rules and noted government's provision ... Migration of CENVAT credit to GST electronic credit ledger - time limit for declaration under Rule 117 of the CGST Rules - extension of time by Commissioner under sub rule (1A) of Rule 117 - technical glitches/portal failure as a ground for extension - challenge to vires of Rule 117Migration of CENVAT credit to GST electronic credit ledger - time limit for declaration under Rule 117 of the CGST Rules - technical glitches/portal failure as a ground for extension - extension of time by Commissioner under sub rule (1A) of Rule 117 - Petition seeking direction to permit migration of prior regime credit despite the prescribed time limit on account of technical glitches, and relief in relation to challenge to Rule 117. - HELD THAT: - The court recorded that the vires challenge to Rule 117 has been dealt with and upheld in a separate judgment (Special Civil Application No. 4252 of 2018), so that challenge is no longer open in the present petition. The court noted the Government's stand that sub rule (1A) has been inserted in Rule 117 to permit the Commissioner to extend the time for making the requisite declaration up to 31.03.2019 where a taxpayer is prevented from making the declaration due to technical reasons. The petitioner, therefore, was directed to seek the remedy of extension under sub rule (1A) before the appropriate authority or court rather than by the present petition. [Paras 2]Petition disposed; petitioner may seek extension under sub rule (1A) of Rule 117 from the appropriate authority/court for inability to upload declaration due to technical glitches.Final Conclusion: The petition is disposed of. The challenge to the vires of Rule 117 is not open in this petition; the petitioner may pursue an extension of time under sub rule (1A) of Rule 117 (permitted up to 31.03.2019 for technical prevention) before the appropriate authority or court. Issues: Difficulty in migrating credit from previous tax regime to GST regime, challenge to vires of Rule 117 of CGST Rules, technical glitches preventing uploading of declaration.1. Difficulty in migrating credit from previous tax regime to GST regime:The petitioner expressed difficulties in migrating the credit of a specific amount from the previous tax regime to the GST regime due to technical glitches on the official portal. The petitioner sought a direction to enable the availing of CENVAT credit in the electronic credit ledger as per Section 140 of the Central Goods and Service Tax Act, 2017. Additionally, the petitioner challenged the vires of Rule 117 of the Central Goods and Service Tax Rules, 2017, which specified the time limit for making the necessary declaration to avail such credit.2. Challenge to vires of Rule 117 of CGST Rules:In a separate judgment delivered in Special Civil Application No. 4252 of 2018, the court upheld the vires of the statutory provision under Rule 117 of the CGST Rules, thereby closing this particular challenge. The court noted that the Government of India had inserted sub-rule (1A) in Rule 117, allowing the Commissioner to extend the time limit for making the declaration up to 31.03.2019 in cases where technical glitches prevented uploading. The petitioner was advised to seek this remedy before the appropriate Court, thus resolving the challenge related to the vires of Rule 117.3. Technical glitches preventing uploading of declaration:Regarding the petitioner's grievance related to technical glitches hindering the uploading of the declaration, the court referred to the previous judgment where the Government of India's stance was recorded. The court highlighted that the insertion of sub-rule (1A) in Rule 117 of the CGST Rules provided a solution for cases where technical reasons prevented timely declaration. The petitioner was informed that they could pursue this remedy before the appropriate Court. Consequently, the petition was disposed of accordingly, addressing the issue of technical glitches preventing the uploading of the declaration.