The Delhi High Court has granted interim relief to the petitioner, who had filed a writ petition before it challenging the non availability of the transitional input tax credit in respect of input stock purchased before one year of the appointed date i.e. before 1st July, 2016.
As per the present provisions under the GST legislations, credit in respect of input stock is not available where the invoices pertaining to such stock are dated before 1st July 2016. However, under a separate provision, where the taxpayer is not in possession of any invoice in respect of input stock, 40-60% of input tax credit is available.
In that sense, there is unfair advantage in favour of those taxpayers who did not have invoices, while those who possessed receipts were restricted by the time-limit of one year. In its interim order, the High Court has directed that the credit for period beyond one year should not be denied to petitioner till finalization of the matter. It may be noted that a tax payer has to file form TRAN-1 to avail the transitional input tax credit. The last date for filing of form TRAN-1 is 27th December, 2017.