GSTAT Kolkata says Wrong Tax-Head Reporting of ITC May Be a Technical Error

A TO Z Chemicals had reported and utilised eligible IGST credit under the CGST and SGST heads instead of the IGST head during FY 2017-18. The authorities demanded reversal of the credit with interest and penalty on the ground that the credit could not be adjusted across tax heads. Relying on the Kerala High Court decisions in Rejimon PadickapparambilAlex and Kalleppuram Metals, GSTAT Kolkata held that the issue required reconsideration in light of the treatment of the electronic credit ledger as a unified pool of eligible credit. The Tribunal also held that the separate ITC reversal of ₹4,176 each under CGST and SGST was no longer sustainable in view of Section 16(5). The appellate order was set aside and the matter remanded for fresh consideration.