Input Tax Credit cannot be denied Over GSTR-2A Discrepancies- Kerala HC

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Input Tax Credit cannot be denied Over GSTR-2A
Discrepancies Kerala HC
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• Introduction
• In a recent ruling, the Kerala High Court
  delivered a significant verdict regarding Input
  Tax Credit (ITC) under the Goods and Services Tax
  (GST) regime. The court held that purchasers
  cannot be denied ITC solely based on
  discrepancies in the GSTR-2A Form, marking a
  crucial development in GST compliance and
  taxpayer rights. Kerala High Court held that GST
  Input Tax Credit Cannot Be Denied to Purchaser
  Merely Because Seller Didnt Record Transaction
  In GSTR-2A Form.
• Facts of the Case
• The case revolved around a petitioner who was
  aggrieved by the denial of a claim for ITC
  totaling Rs. 44,51,943.08 for Central GST (CGST)
  and State GST (SGST). The authorities limited the
  claim to an excess of Rs. 1,04,376.05 as CGST,
  with an equal amount of SGST credit being denied.
  This denial was based on the grounds that,
  according to the GSTR-2A Form related to invoice
  supply, the taxpayer would only be eligible for
  the input tax amount shown in GSTR-2A. The
  petitioners counsel argued that denying input
  tax credit solely on the basis of the amount
  mentioned in GSTR-2A, which the petitioner had no
  control over, was unjust. It was contended that
  the Assessing Authority should independently
  evaluate the petitioners ITC claim, irrespective
  of the GSTR-2A amount. The counsel relied on
  Section 16(2) of the GST Act, which stipulates
  that no registered person shall be entitled to
  the credit of any input tax unless certain
  conditions are fulfilled. It was asserted that
  the petitioner had fulfilled all these
  conditions, including the payment of tax to the
  seller-dealer, who had issued a valid tax
  invoice.

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• The petitioner contended that despite complying
  with all stipulated conditions, the assessing
  authority had reversed the availed credit and
  directed the petitioner to deposit the tax
  corresponding to the disallowed input tax credit.
  The counsel also cited various precedents that
  supported the petitioners claim, emphasizing
  that ITC could not be denied if the taxpayer
  genuinely paid the tax to the seller-dealer, and
  no collusion was found between the parties.
• Held by the Court
• The Kerala High Court, in its ruling, held that
  Input Tax Credit (ITC) cannot be denied to a
  purchaser solely on the grounds of non-reflection
  of the transaction in the GSTR-2A Form. This
  decision underscores the principle that
  discrepancies in the GSTR-2A should not be used
  as the sole basis for rejecting legitimate ITC
  claims. It reinforces the importance of
  independently assessing ITC claims and ensuring
  that taxpayers are not unfairly penalized due to
  factors beyond their control. This ruling has
  significant implications for GST compliance and
  taxpayer rights, providing clarity and protection
  for businesses seeking to claim input tax credits
  in accordance with the law. It sets a precedent
  that ITC should be granted based on the
  fulfillment of statutory conditions rather than
  discrepancies in forms or documents. Diya
  Agencies Vs State Tax Officer (Kerala High
  Court) WP(C) No. 29769 of 2023 12/09/2023
• Tags Goods And Services Tax, GST, GSTR 2A, high
  court judgments, input tax creditRead more
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