Denying GST ITC On Advance Receipts Would Create Inconsistency And Disrupt Harmonious Functioning Of GST Provisions, Rules Bombay High Court

Case Title: L & T IHI Consortium Versus UOI

The Bombay High Court has ruled that denying (Input Tax Credit) ITC on advance receipts would create inconsistency and disrupt the harmonious functioning of GST provisions.

The bench of Justice G. S. Kulkarni and Justice Jitendra Jain has interpreted Section 7 of the Central Goods and Services Tax (CGST) Act, determining that it encompasses “supplies agreed to be made” within the definition of supply. The advance payments received by the petitioner are subject to GST, thereby expanding the definition of a taxable supply.