IGST Credit Wrongly Taken as CGST and SGST Sent Back for Fresh Look: GSTAT Kolkata

The Goods and Services Tax Appellate Tribunal, Kolkata set aside an order requiring reversal of IGST credit availed under the CGST and SGST heads, applying Kerala High Court rulings on the unified credit ledger.

The Goods and Services Tax Appellate Tribunal (GSTAT), Kolkata has set aside an order directing a trader to reverse, with interest and penalty, input tax credit (ITC) of Integrated Goods and Services Tax (IGST) that it had mistakenly availed under the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) heads, and remanded the appeal in light of Kerala High Court rulings [A to Z Chemicals v. Krishna Gopal Saha & Ors., 2026-juristway.com-3377-GSTAT(Kolkata)-GST].

The Bench of Satya Gopal Chattopadhyay, Member (Judicial), and Anindya Mitra, Member (Technical) heard the appeal; Mr. Chattopadhyay wrote the order. A demand under Section 73 of the CGST Act, 2017 for 2017‑18 required reversal of ₹1,43,404 each under CGST and SGST, which the trader said was IGST credit entered under the wrong heads. The First Appellate Authority held that credit under one head could not be adjusted against another, and also upheld reversal of ₹4,176 each as credit taken beyond the time allowed by Section 16(4).

The trader argued that 2017‑18 was the first year of GST, that Form GSTR‑2A became available only at the end of 2018, and that the total credit did not exceed the tax paid by its suppliers, so there was no loss of revenue. The Revenue said the CGST Act contained no provision for such relief.

On the smaller amount, the Tribunal held that the dispute was put to rest by the non obstante clause in Section 16(5), which absolves the taxpayer from reversing the ₹4,176 each.

On the main issue, the Tribunal applied Kalleppuram Metals v. Union of India (2024) and Rejimon Padickapparambil Alex v. Union of India (2024). The Kerala High Court had treated the electronic credit ledger as a unified source, so that availing IGST credit under CGST and SGST is not a wrongful availment or utilisation of ITC and causes no loss of revenue. Section 73 is attracted only where tax is unpaid or short paid, erroneously refunded, or ITC is wrongly availed or utilised.

Holding that these rulings squarely applied, the GSTAT set aside the appellate order and directed the First Appellate Authority to reconsider the appeal afresh in their light, after a reasonable hearing, within three months of communication of its order.

2026-juristway.com-3377-GSTAT(Kolkata)-GST