Articles 9th Dec 2024
Recently, the Hon’ble Bombay High Court in a writ petition in L&T IHI Consortium vs Union of India and Ors dated 14th November 2024 held that the petitioner was entitled to avail GST Input Tax Credit on GST paid on advance amounts to its contractor, before the actual service was received by the petitioner from its contractor. The dispute had arisen under a contract between the petitioner (L&T IHI Consortium) and the Mumbai Metropolitan Development Authority (MMRDA) for development of Atal Setu – Mumbai Trans Harbour Link Project.
The Hon’ble High Court in the said ruling has laid significant emphasis on harmonious interpretation of taxing statutes and a judicious reading of the provisions under GST, which require the taxpayers to discharge GST at the instance of payment of ‘advance’ for services vis-à-vis the provisions which permit taking ITC only on actual receipt of goods/services.
Against this background, our Partner Stella Joseph, Principal Associate Yash K Desai have co-authored an article titled “GST Input Tax Credit on ‘Advance Payments’: Recent ruling of the Hon’ble Bombay High Court” published by Lexology which discusses the key facts, issues and findings by the Hon’ble Bombay High Court along with a few key takeaways for the taxpayers.
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