A division bench of the Bombay High Court has held that the amount remaining in the Electronic Credit Ledger can be utilized to pay pre-deposit as per section 107(6) of the Maharashtra GST Act, 2017.
The petitioner, M/s Oasis Realty approached the appellate authority impugning an order passed by the department. The petitioner, wanted to comply with the requirements of Sub-section 6 of Section 107 of the Maharashtra Goods and Services Tax Act, 2017 of paying a sum equal to 10% of the amount of Tax in dispute arising out of the impugned order and pay the amount utilising the credit available in the Electronic Credit Ledger. However, the request was rejected.
The petitioner approached the Court contending that sub-paragraph (5) of paragraph 6 of the circular reproduced in paragraph (11) above makes it clear that Electronic Credit Ledger cannot be used for making payment of any tax which is payable under the reverse charge mechanism.
Considering the submissions, Justice K. R. Shriram & Justice A. S. Doctor held that “since in the Petitions before us the amounts payable are towards output tax, we hold that Petitioners may utilise the amount available in the Electronic Credit Ledger to pay the 10% of Tax in dispute as prescribed under Sub-section (6) of Section 107 of MGST Act.” “Accordingly, the impugned Order-in-Appeal No.JC/APP-V/GSTDefective/A.F.Y/2021-22/A.O.Y..2022-23/-B-1 dated 6th April, 2022 and FORM GST APL-02 passed by Respondent No.2 is quashed and set aside. The Appeal is restored to file on the undertaking of Petitioner that it shall debit the Electronic Credit Ledger within one week of this order getting uploaded towards this 10% payable under Section 107(6)(b), if not already debited, is accepted,” the Court said.
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