‘Retrospective amendment’ in GST law: Companies file writ petition in Delhi High Court


Many companies that had not been able to claim transitional tax credit have dragged the government to court over a retrospective amendment in the Goods and Services Tax (GST) framework.

The companies claim the government amended the law prohibiting companies to avail tax credit if they had “forgotten” about it only after few companies started claiming it and even approached the courts. Many companies had claimed that when the new tax regime was introduced in July, 2017, they forgot to claim the transitional credit.

When India moved from old indirect tax regime to GST, a onetime transition of credit was allowed. That is companies could set off part of the taxes paid during old tax regime against future GST liabilities.


Many companies claimed that they had simply forgotten to claim the transitional credit. Legal experts say that the government brought in an amendment only after a Delhi High Court judgment which seemed to favour the taxpayers.

“It is very important for the court to decide at some stage on the validity of the retrospective amendment carried out in section 140 of the CGST act as this amendment has come into effect after a Delhi High Court decision on transitional credit. The retrospective amendment to tax laws can happen only in the rarest of rare cases to remove the anomalies of law”, said Abhishek A Rastogi, Partner at Khaitan & Co, who is arguing for petitioners.

The government has also challenged the Delhi High Court judgment in the Supreme Court and the case is ongoing.

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