Input tax credit depends on actual tax remittance; Kerala HC denied credit where collected tax was not paid to the exchequer.

Input tax credit under the CGST/SGST framework is a conditional statutory benefit, and it is unavailable where the tax collected from the purchaser has not actually been remitted to the exchequer. The Kerala HC rejected the argument that this reading would make other recovery and enforcement provisions redundant, and applied the principle that the purchasing dealer must satisfy the prescribed statutory conditions before claiming the concession. On that basis, credit was denied because the condition of actual payment of tax was not met.

---

---

Issues: Whether input tax credit could be availed under Section 16(2)(c) of the Central Goods and Services Tax/State Goods and Services Tax Act, 2017 when the tax collected from the purchaser had not actually been remitted to the exchequer.

Analysis: The petitioner's contention that a contrary interpretation would render other recovery and enforcement provisions otiose was not accepted. The right to input tax credit was treated as a conditional statutory benefit, available only when the statutory condition of actual payment of tax to the exchequer is satisfied. The Court relied on the earlier view that the purchasing dealer must comply with the prescribed conditions to avail the concession.

Conclusion: Input tax credit was held unavailable to the petitioner in the absence of actual remittance of the collected tax to the exchequer.

---