Transition of credit in respect of TDS of Tamil Nadu VAT regime can’t be denied in GST regime: Madras HC

 

 

DMR Constructions v. Assistant Commissioner – [2021] 125 taxmann.com 252 (Madras)

 

 Short Overview:

 

The petitioner accumulated credit of TDS in the era of TNVAT and it was permitted to carry forward the same from year to year.

 

The petitioners sought transition of the accumulated TDS for set off against output tax -GST liabilities, but this was denied.

 

It filed writ petition against the same.

 

The Honorable High Court observed that section 140 of the GST Act permits carrying forward of the credit of ‘VAT’ and Entry Tax under the existing law.

 

Any deduction made towards anticipated tax liability would assume the character of tax and will not change or fluctuate depending on whether it is held as credit or whether it is an adjustment against tax liability.

 

Since the amount collected/deducted has been captured in the returns of turnover filed under the erstwhile TNVAT regime, such amount would stand included for the purposes of transition under section 140.

 

Therefore, the petitioners held to be entitled to transition TDS under the TNVAT Act in terms of Section 140.

 

Conclusions :

 

Transition of credit in respect of TDS of Tamil Nadu VAT regime can’t be denied in GST regime: Madras HC