Judgement Update | High Court allows transition of various cesses (like education cess) to GST regime

by | Sep 18, 2019

This is to update you regarding the recent decision of Madras High Court in the case of Sutherland Global Services Private Limited v. AC CGST and Central Excise, where the Court has allowed the transition of credit of cesses levied under the erstwhile laws to GST regime.

In this case, the Court was dealing with transition of credit of Education Cess (‘EC’), Secondary Higher Education Cess (‘SHEC’) and Krishi Kalyan Cess (‘KKC’) to the GST regime. The revenue contended that the utilisation of credit of EC and SHEC was disallowed post March 1, 2015 and consequently, it became a ‘dead claim’.

The taxpayer contended that there is no provision either under the erstwhile regime or GST regime which lapses the credit of various cesses. Thus, the credit was validly availed and carried forward into GST regime. With respect to the retrospective amendment, the taxpayer contended that Section 28(b)(i) and 28(c)(i) of the Central Goods and Services Tax (Amendment) Act, 2018 have not been notified and thus, the amended definition of ‘cenvat credit of eligible duties’ would not dilute the availably of credit of these cesses.

The Court rejected the revenue’s contentions and allowed carry forward of credit of EC, SHEC and KKC.

(Copy of the Court’s order is not available in the public domain. The information contained herein is source based)

NITYA Comments

The Court has rightly allowed transition of credit of various cesses validly availed by a taxpayer, into GST regime. The same is detailed in our update NITYA’s Outlook | Issue 15 | Eligibility of transitional credit of various cesses dated April 18, 2019

 

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