Funny GST: GST is designed to ensure seamless flow of credit but Pre-deposit in cash is must for preferring an appeal before the appellate authority

Loading

Funny GST: GST is designed to ensure seamless flow of credit but  Pre-deposit in cash is must  for preferring an appeal before the appellate authority

The question remains whether GST ensures seamless flow of credit? Why do we have such restrictions? 

The Hon’ble Orissa High Court in case of M/s Jyoti Construction vs. Deputy Commissioner of CT & GST vide order dated 07.10.2021 has held that:

1. Pre-deposit u/s 107(6) for preferring an appeal before the appellate authority u/s 107 can be made in cash only i.e. debiting the electronic cash ledger.

2. Balance of Electronic credit ledger i.e. accumulated balance of ITC can only be used for making the payment of output tax i.e. tax chargeable on any supply of taxable goods or services.

3. Since Pre-deposit is not equivalent to Output tax, therefore ITC cannot be used for making the pre-deposit.

4. Copy of the order is attached hereunder for the ready reference:

Menu