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Retrospective amendment in transitional provisions: Whats up next

Retrospective amendment in transitional provisions, Notification no. 43/2020

Tradition, of changing what is not suitable for the revenue. Following the suit, provisions related to transitional ITC are changed. Needless to say, retrospectively. After numerous decisions in favor of taxpayers. The retrospective amendment in transitional provisions is made. Delhi high court recently pronounced that a time limit of 90 days is not applicable. It is the only directory and not mandatory. But yes, you cant file transitional ITC claims perpetually. The time limit under the limitation Act will apply. This time limit is of three years. So we add three years to 1st July 2017. It is 30th June 2020. 

Retrospective amendment in transitional provisions via notification no.43/2020 central tax. 

Text of notification:

G.S.R. ….(E).— In exercise of the powers conferred by sub-section (2) of section 1 of the Finance Act, 2020 (12 of 2020) (hereafter in this notification referred to as the said Act), the Central Government hereby appoints the 18th day of May, 2020, as the date on which the provisions of section 128 of the said Act, shall come into force.

This provision inserts the term “within such time” at various places.  Section 128 of FA 2020 amended section 140 of CGST Act.

The earlier decision of Delhi high court read down the provision of Rule 117 of CGST rules. This rule provided the time limit of 90days to file Tran 1. One of the reasons behind the decision was the absence of any substantive provision related to the time limit. But now the provision is inserted into CGST Act. That too retrospectively. 

What should be the course of action now?

Taxpayers stuck with some transitional credit should try to fill the form manually ASAP.  This change will definitely see the courtrooms again. The decision can be against it. But then 30th June 2020 is the final limit in any case. But then the department refuses to accept the form quoting the change. Although in many decisions it is clarified that only filing of a statement cant takes a vested right. The input tax credit is a vested right of taxpayers. We have many cases in our favor.

You can see some of those cases.

A.B. Pal Electricals v Union of India 
SCG Contracts India Pvt. Ltd. vs. KS Chamankar Infrastructure Pvt. Ltd. 
Willowood Chemicals Pvt. Ltd. vs. Union of India 
ALD Automotive Pvt. Ltd. vs. Commercial Tax Officer
M/s Blue Bird Pure Pvt. Limited vs. Union of India 
SARE Realty Projects Pvt. Limited vs. Union of India
Bhargava Motors vs. Union of India
Kusum Enterprises Pvt. Limited vs. Union of India 
M/s Aadinath Industries &Anr vs Union of India
Lease Plan India Private Limited vs Government of National Capital Territory of Delhi and Ors
Godrej & Boyce Mfg. Co. Ltd. Through its Branch Commercial Manager vs Union of India
Krish Automotors Pvt. Ltd. v UOI
Adfert Technologies Pvt Ltd v Union of India
Siddharth Enterprises v. The Nodal Officer of Gujrat High Court
JakapMetind Pvt Ltd v Union of India
Indsur Global Ltd. v. Union of India
Salem Advocates Bar Association v. Union of India

Commissioner of Central Excise, Madras v Home Ashok Leyland

amendment in transitional provisions

amendment in transitional provisions


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Profile photo of CA Shafaly Girdharwal CA Shafaly Girdharwal


New Delhi, India

CA Shaifaly Girdharwal is a GST consultant, Author, Trainer and a famous You tuber. She has taken many seminars on various topics of GST. She is Partner at Ashu Dalmia & Associates and heading the Indirect Tax department. She has authored a book on GST published by Taxmann.

Discuss Now
Opinions & information presented by ConsultEase Members are their own.
  • Yashas

    How do we file the Tran-1 manually now? What documents & attachments required for such manual filing?