- Madras High Court held that ISD credit can be distributed only after ITC becomes eligible under Section 16 of the CGST Act, not merely upon receipt or reflection of the supplier’s invoice.
- The court clarified that “credit available for distribution” refers to admissible ITC, and distribution cannot be mandated just on invoice receipt.
- The requirement to distribute in the “same month” applies to the month when ITC becomes legally available, not when the invoice is received.
- The court rejected the Department’s view that Rule 39(1)(a) requires immediate distribution upon invoice receipt, emphasizing that procedural rules cannot override substantive conditions for ITC availment.
Source: taxand.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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