Recent judgments from various High Courts have provided significant clarity and relief on several GST provisions.
The Bombay High Court allowed the inter-state transfer of unutilized Input Tax Credit (ITC) during business amalgamation, directing tax authorities to facilitate this manually if the portal does not permit it. In a major relief for many businesses, the Madras High Court ruled that ITC for the initial GST years (2017-18 to 2020-21) cannot be denied solely due to delayed return filing if filed by November 30, 2021.
On procedural matters, courts delivered contrasting verdicts. The Madras High Court invalidated a single Show Cause Notice (SCN) covering multiple financial years, while the Delhi High Court upheld such consolidation for cases involving fraudulent ITC claims, indicating this issue may need Supreme Court intervention.
Furthermore, the Karnataka High Court ruled that seconding employees from abroad is not a taxable service if a true employer relationship exists with the Indian entity. Another Madras ruling confirmed that exports paid for in Indian Rupees through an intermediary still qualify as zero-rated exports, making the exporter eligible for an ITC refund.
These rulings collectively reduce litigation and offer practical guidance for businesses navigating complex GST scenarios.
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