GST | Stereo System In E-Rickshaw An Input, Calcutta High Court Grants Refund To Manufacturer
The Calcutta High Court, in a matter concerning admissibility of Input Tax Credit (ITC) for purchase of 'stereo system' to be used in E-rickshaw, has granted Refund claim of Unutilized Input Tax Credit under inverted duty structure amounting to approximately ₹8 lakhs. The Calcutta High Court was called-upon to decide whether "Stereo System" was an input/ raw material in...
The Calcutta High Court, in a matter concerning admissibility of Input Tax Credit (ITC) for purchase of 'stereo system' to be used in E-rickshaw, has granted Refund claim of Unutilized Input Tax Credit under inverted duty structure amounting to approximately ₹8 lakhs.
The Calcutta High Court was called-upon to decide whether "Stereo System" was an input/ raw material in manufacturing of E-rickshaw covered by HSN-87031090. Also, whether ITC involved in purchase of "stereo system" would be eligible for refund vide clause (ii) of first proviso to Section 54 (3) of the WBGST/CGST Act.
Justice Om Narayan Rai noticed that the Appellate Authority in similar scenario took divergent views on admissibility of ITC of 'Stereo System' as an Input/Raw Material and sought clarification from the GST Department. Upon perusing the detailed reply which deliberated on how 'Stereo System' being in the course of furtherance of business i.e. manufacturing of E-rickshaw would get covered by the definition of 'Input' in terms of Section 2(95) of the CGST Act, 2017, the Calcutta High Court held that Petitioner was entitled to refund.
A Refund claim of Unutilized Input Tax Credit under inverted duty structure amounting to ₹8,94,583 came to be rejected by the Adjudicating Authority. On appeal,
Petitioner clarified that on identical grounds vide an order dated May 30, 2024 refund had been allowed in its own case.
On diverging opinions of Appellate Authority, the Calcutta High Court noted instructions received by Respondent State vide an email from Additional Commissioner (Law) wherein it was stated that Petitioner's claim for Refund was accepted. It was clarified that ITC involved in purchase of 'Stereo System' to be used in E-rickshaw would be eligible for refund as per clause (ii) of first proviso to Section 54 (3) of the CGST Act,2017.
Accordingly, the Calcutta High Court set aside appellate order disallowing Refund and directed to process the same after verifying record.
Case Name: Hooghly Motors Pvt. Ltd. vs. The State of West Bengal & Ors.
For Petitioner: Advocates Avra Mazumder, Alisha Das, Elina Dey
For Respondent State: Advocates Nilotpal Chatterjee, Tanoy Chakraborty, Saptak Sanyal