Gujarat HC Bars Cash Refund of Transitional VAT Credit, Allows Re-credit Relief

• The Gujarat High Court held that transitional VAT credit carried into GST as SGST ITC cannot be refunded in cash under Section 54(3) on the basis of inverted duty structure.
• Once a taxpayer opts under Section 140 to move unutilized VAT credit into the Electronic Credit Ledger, Section 142(3)’s bar prevents such a refund.
• If the refund is rejected, the taxpayer can seek re-credit of the amount to the Electronic Credit Ledger under Rule 93.
• Authorities must consider eligible re-credit requests and issue orders in Form GST PMT-03 within 12 weeks.

Source: a2ztaxcorp.net

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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