As a major relief to dealers holding pre–GST stocks, the Hon'ble Delhi High Court has granted interim relief to petitioners and allowed them to avail input tax credit (ITC) on unsold stocks which are more than twelve months old.
Facts of the case
Section 140(3) of the Central Goods and Services Act, 2017 (CGST Act) enables specified persons registered under GST to claim transitional credit in respect of goods lying in stock as on 30 June 2017 (stock). Section 140(3)(iv) restricts credit on stock purchased not earlier than twelve months from the appointed day i.e. 01 July 2017.
A group of petitioners, holding sizeable stock of goods more than twelve months old, challenged the disentitlement contained in Section 140(3)(iv) of CGST Act.
Interim judgment of Delhi HC
The Hon'ble Delhi HC has granted interim relief to the petitioners and allowed them to avail ITC on stocks which are more than twelve months old, pending final disposal of the matter.
Comment
The judgment comes as relief to petitioners having relatively longer inventory holding period. As the interim relief is qua the petitioners, the judgment could invite a fresh round of petitions being filed by taxpayers seeking similar relief, at times, when Government is already rattled by huge ITC claims on transitional stock.
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