2025 (1) TMI 396 - HC - GST

Gujarat HC to Hear Challenge Against CGST Act's Section 16(2)(c) for Imposing Excessive Compliance on ITC Claimants.

The Gujarat HC has scheduled a hearing to address the challenge against section 16(2)(c) of the Central Goods and Services Tax Act, 2017, which is ... Vires of section 16(2)(c) of the Central Goods and Services Tax Act, 2017, identical to the Gujarat Goods and Services Tax Act, 2017 - seeking entitlement for Input Tax Credit (ITC) - HELD THAT:- Rule, returnable on 29th September, 2022. Notice to the learned Attorney General of India is already issued as per order dated 1.12.2020. In the case before the Gujarat High Court, the petitioners challenge the 'vires of section 16(2)(c) of the Central Goods and Services Tax Act, 2017,' which mirrors the Gujarat Goods and Services Tax Act, 2017. The petitioners, represented by Mr. Sahil Rao, argue that this provision imposes an undue burden on purchasers seeking Input Tax Credit (ITC). Specifically, purchasers must demonstrate that the seller is registered under the GST Act and has paid taxes on supplied goods. Additionally, purchasers must prove that the seller has utilized admissible input tax credit for all past transactions related to the goods supplied. This requirement is described as a 'multiple transmission of onus,' placing a significant compliance burden on purchasers. The court has scheduled the rule returnable for 10th July 2024, with notice already issued to the Attorney General of India. The matter will be heard alongside Special Civil Application No.15188 of 2020 and related cases.