Tech limitations cannot be ground to deny input tax credit under GST, says Delhi HC

The Delhi High Court has said that the rights of Goods & Services Tax (GST) assessees ‘cannot be subjugated’ to the poor and inefficient software systems adopted by the authorities. The ruling is likely to benefit assessees who suffer due to technical glitches.

“The software systems adopted by the respondents have to be in tune with the law, and not vice-versa. The system limitations cannot be a justification to deny the relief, to which the petitioner is legally entitled,” the court ruled in a matter related to denial of use of unutilised input tax credit (ITC).

Commenting on the ruling, Harpreet Singh, Partner at KPMG, said the order is likely to have far reaching positive domino effect under GST.