Delhi HC gives interim relief to retailers on transitional credit
, ET Bureau|
Dec 14, 2017, 01.17 AM IST
The Delhi High Court has allowed retailers to continue to claim transitional credit against their goods and services tax liability on goods they bought before GST implementation beyond December 31, in an interim relief to the trade.
The court would hear the matter on January 25 next year. "In the meanwhile, it is open to the petitioners to proceed and claim credit or pay duty, as the case may be," a High Court bench said on Wednesday.
Under the current law, retailers who bought goods without corresponding invoices before the new tax regime was implemented on July 1 are not entitled to set off the taxes paid on them against their GST liability after six months, setting the deadline on December 31.
The Delhi High Court decision comes as a relief for several retailers who otherwise would have been forced to either sell the goods at discounts to clear off stocks this month itself or let go of past credits, tax experts said.
"The larger question is whether any law has power to dictate how business is conducted and whether it can lay restrictions on the time frame of selling any products," said Abhishek A Rastogi, partner at Khaitan & Co that represents retailers in the case. "Many retailers were looking to dispose goods on which they had paid sales tax, excise, etc., before end of the year as they would not have availed of transitional credit," he said.
Some retail stores and chains have been preparing to offer big discounts in a year-end sale this month on pre-GST stocks, industry insiders said. Many were planning discounts up to 50% on branded clothes, gadgets, kitchen appliances and toys, they said.
The court would hear the matter on January 25 next year. "In the meanwhile, it is open to the petitioners to proceed and claim credit or pay duty, as the case may be," a High Court bench said on Wednesday.
Under the current law, retailers who bought goods without corresponding invoices before the new tax regime was implemented on July 1 are not entitled to set off the taxes paid on them against their GST liability after six months, setting the deadline on December 31.
The Delhi High Court decision comes as a relief for several retailers who otherwise would have been forced to either sell the goods at discounts to clear off stocks this month itself or let go of past credits, tax experts said.
"The larger question is whether any law has power to dictate how business is conducted and whether it can lay restrictions on the time frame of selling any products," said Abhishek A Rastogi, partner at Khaitan & Co that represents retailers in the case. "Many retailers were looking to dispose goods on which they had paid sales tax, excise, etc., before end of the year as they would not have availed of transitional credit," he said.
Some retail stores and chains have been preparing to offer big discounts in a year-end sale this month on pre-GST stocks, industry insiders said. Many were planning discounts up to 50% on branded clothes, gadgets, kitchen appliances and toys, they said.
