INDUSIND MEDIA COMMUNICATIONS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) Heard. Rule.

(2.) On 10th Aug., 2017, petitioner No. 2 transferred a part of its business i.e. Headend In The Sky (HITS) to petitioner No. 1. However, as on 1st July, 2017 there was input credit available to the petitioner No. 2 from the earlier Cenvat Regime. Thus, the petitioner No. 2 sought to carry forward its available input credit to the GST regime by filing TRANS-1. In its revised TRANS-1 the petitioner No. 2 in terms of Sec. 140(8) of the Central Goods and Services Tax Act, 2017 (for short "the Act") sought to distribute the input credit available to it amongst its branch offices/locations which have separate registration under the Act. However, due to technical difficulties, though the revised TRANS-1 was accepted, the distribution of the credit available to it among its various branches/locations is not reflected on the website. Thus, the GST credit ledger available at the various branches/locations do not reflect the credit which would be available to it on account of the distribution done by the Mumbai location of petitioner No. 2.

(3.) In cases of transfer of business as in this case from petitioner No. 2 to petitioner No. 1 in terms of Sec. 18(3) of the Act, the transferee of a business would be entitled to take input tax credit which remains unutilised in the transferor's books. This unutilised credit would be reflected in ITC-02 to be filed by the petitioner No. 2. However, this flow of input credit to petitioner No. 1 from petitioner No. 2 is not taking place as the Revised TRANS-1 to the extent it shows distribution is not being reflected. This admittedly in view of the technical difficulties as recorded in the minutes of the second Meeting of Grievance Redressal Committee held on 21st Aug., 2018, where the system is not accepting a downward revision of input credit available. As a consequence of the distribution as sought by the petitioner No. 2 to the various locations/branches in its revised TRANS-1 not being reflected on the website, the input credit cannot be reflected in the GST ledger at the branches/locations. Therefore, the branches/locations are not able to utilise the input credit by filing the GSTR-3B. Further it is pointed out that in terms of Sec. 16(4) of the Act, the last date for taking the input tax credit for the financial year period ending March, 2018 would be the 20th Oct., 2018. In case the same is not reflected in the Form GSTR-3B return the petitioners' locations/branches would lose the benefit of the input tax credit. This position in law is not disputed by the Revenue.