Transfer of ITC without filing ITC-02

[ROHIT GOEL]

Dear Experts,

Assessee was a Pvt Ltd company and got converted into LLP in FY 2019-20. It voluntarily cancelled GST Regn of company and got new Regn as LLP. Post conversion, it realised that it did not claim about Rs 25 lakhs eligible ITC which was reflected in GSTR-2A of company. This ITC was claimed by LLP post conversion in its 3B. Now GST Deptt has raised demand on LLP as it has claimed Rs 25 lakhs excess ITC which is not reflected in its GSTR-2A but in 2A of company. I understand that correct route would have been to claim ITC in GSTR-3B of company and then transfer to LLP via ITC-02.

However, as per deeming provisions of LLP Act 2008, LLP was entitled to all rights vested in favour of company post conversion. Can assessee contest that ITC could still be claimed despite not appearing in 2A of LLP and despite not filing ITC-02?

AI Summary

Transfer of Input Tax Credit: failure to file ITC 02 can trigger departmental demand despite vesting on conversion.
An LLP claimed input tax credit in its GSTR 3B after converting from a company without filing Form GST ITC 02; the department raised a demand because the credit remained reflected in the company's GSTR 2A. GST rules require electronic transfer via ITC 02 on change of constitution, making procedural compliance the basis for adjustment, while the LLP Act's vesting of rights and judicial precedents resisting denial of credit for procedural lapses form the core opposing arguments.