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Section 140 of CGST Act was amended (vide Finance Act 2020) with retrospective
effect from 1 July 2017 to prescribe the time limit for filing the relevant
forms and availing pre - GST input tax credit
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Now, the effective date of the amendment is notified - Amendment is being made
effective from 18 May 2020
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Recently, Delhi HC held that the time limit prescribed under Rule 117 is
directory and not mandatory. However, the HC has not commented on the effect of
retrospective amendment to Section 140 of CGST Act.
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Pursuant to the amendment, any fresh application filed/ pre - GST credit
transitioned to credit ledger beyond the time limit under Rule 117 will
be disputed by the department
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This is likely to open another round of litigation
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While the Government is introducing various measures to boost liquidity,
restricting pre - GST credit which has been rightfully availed by taxpayers
will only affect the working capital
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In these difficult times, Government should consider framing a scheme to allow
pre - GST credit as another measure to boost liquidity
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