GST UPDATE

Desk of CA. Praveen Sharma Series- 511

KERALA HIGH COURT

in the case of M. Trade Links

Section 16 of the CGST Act, 2017 — Input Tax Credit

In the present batch of writ petitions, challenges were raised against Sections 16(2)(c) and 16(4) of the Central Goods and Services Tax (CGST) Act and the corresponding State Goods and Services Tax (SGST) Acts. The petitioners argued that these sections infringed upon Articles 14 and 19(1)(g) of the Indian Constitution and were unworkable.

Respondent's Argument:

The respondent countered that neither Section 16(2)(c) nor Section 16(4) violated Articles 14 and 19(1)(g) and asserted that the provisions were workable. The respondent further mentioned that the government acknowledged the initial difficulties in the GST regime rollout, which led to the issuance of GST Circulars No. 183/15/2022-GST dated 27.12.2022 and No. 193/05/2023-GST dated 17.07.2023. These circulars addressed the issues from the introduction of GST until the implementation of Section 16(2)(aa) effective from 01.01.2022.

Court's Observation:

The court observed that the government had taken steps to address initial difficulties through the aforementioned circulars. These circulars covered the period from the GST introduction up to the enactment of Section 16(2)(aa). Additionally, the amendment to Section 39, which changed the due date for furnishing returns to 30th November from the previous 30th September, was deemed procedural and thus, was applied retrospectively.

Held:

The Hon’ble High Court rejected the challenge to the constitutional validity of Sections 16(2)(c) and 16(4). The court granted the petitioners the liberty to claim the benefits provided under the two circulars. Consequently, the time limit for furnishing the return for the month of September is now considered to be 30th November of each financial year, effective from 01.07.2017.

Summary

The court upheld the constitutional validity of Sections 16(2)(c) and 16(4) of the CGST Act, while also recognizing the government's steps to ease initial GST implementation issues. The amendments regarding the filing deadlines were applied retrospectively to aid compliance.

For further details, you can refer to:

- [GST Circular No.183/15/2022-GST](https://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular-183-2022-GST.pdf)

- [GST Circular No. 193/05/2023- GST](https://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular-193-2023-GST.pdf)

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CA. Praveen Sharma

NIRC Candidate 2024

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