No need of reversal of IGST Credit wrongly claimed instead of CGST & SGST: Calcutta High Court


No need of reversal of IGST Credit wrongly claimed instead of CGST & SGST: Calcutta High Court


The Calcutta High Court recently delivered a significant judgment in the case of M/S Cosyn Limited VS. Assistant Commissioner of State Tax. The dispute centered around the reversal of Input Goods and Services Tax (IGST) credit wrongly claimed instead of Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST).

The relevant provisions invoked by the appellant are Section 18(a) and (c) of the Integrated Goods and Services Tax (IGST) Act, 2017, read with Rule 4 of the Goods and Services Tax Settlement of Fund Rules, 2017.

Key Arguments in the case were as under:
GST Credit Utilization: The appellant claimed IGST Input Tax Credit (ITC) in February 2018.
Disputed Invoices: The disputed invoices (1Z11801869 and 1Z11801870) were raised by Mphasis Limited (Respondent 2) on February 16, 2018.
Transfer of Credit: The appellant argued that the input tax credit utilized for payment of SGST was subsequently transferred and appropriated to the respective State (West Bengal).

Court’s Reasoning and Ruling:
The High Court held that there was no need for the reversal of IGST credit wrongly claimed instead of CGST and SGST.

The court cited Section 18 of the IGST Act, which outlines the reduction of Integrated Tax (IDST) when credit is utilized for payment of state tax. The amount collected as IGST is apportioned to the appropriate State Government.

1.  The appeal was allowed.
2.  The order passed in the writ petition was set aside.
3.  The impugned assessment order dated August 21, 2023, was also set aside.
4.  The respondent/department is directed to refund the 10% pre-deposit made by the appellant within eight weeks from the receipt of the server copy of this order.

The copy of the order is as under: