Tag: Input Tax Credit

ArticleGST Article

Mandatory Requirement of Written ‘Reasons to Believe’ Under Rule 86A for Blocking Input Tax Credit (ITC)

byCA Bimal Jain

The Hon’ble Allahabad High Court in the case of Pilcon Infrastructure Pvt. Ltd. held that blocking of Input Tax Credit under Rule 86A of the U.P. GST Rules without recording specific, written ‘reasons to believe’ linking the assessee to fraudulent transactions is without jurisdiction and illegal, emphasizing that mere reliance on ex parte communications or generic alerts from DGGI does not fulfil the statutory requirement.

ArticleGST Article

No Legal Restriction on Inter-State Transfer of CGST/ IGST Input Tax Credit on Merger of companies

byCA Bimal Jain

The Kerala AAR in the matter of Flytxt Mobile Solutions Private Limited held that the applicant is eligible to transfer the closing balance of CGST and IGST appearing in the electronic credit ledger of the Haryana GSTIN of a merged company to the Kerala GSTIN of the transferor company on merger, despite the GST portal’s technical restrictions rejecting inter-state transfers.