Tag: Electronic Credit Ledger

IGST availed as CGST and SGST – Order demanding Penalty and Interest, Set Aside

Citation:

Maruthengal Moideen vs. State Tax Officer

High Court of Kerala

[2025] 171 taxmann.com 215 (Kerala)[13-01-2025]

A similar decision was given in the case of Kalleppuram Metals vs. Union of India, summarized as below (Click to Visit):

Claiming IGST as CGST/SGST does not attract Penalty and Interest – Order remanded back for reconsideration

Findings of the Court:

Relying upon the decision in the case of Rejimon Padickapparambil Alex v. Union of India and others 2024 KHC Online 7215 (Summarized in the above Kalleppuram Metals Case), it was observed that:

  1. “Electronic credit ledger has to be treated as a pool of funds, designated for different types of taxes such as IGST, CGST and SGST. The credit ledger represents a wallet with different compartments of funds“.
  2. Since the petitioner had availed credit under the CGST and SGST instead of IGST and utilised the same for payment of GST, the benefit of the decision in Rejimon Padickapparambil’s case is applicable to the petitioner.

Held:

  1. The Impugned Orders to the extent of demanding Interest and Penalty are set aside.
  2. Department is directed to reconsider the matter afresh, bearing in mind the decision in Rejimon Padickapparambil’s case.