Credit from non- migrated GST number to be transferred to migrated GST number

Case Title: BCC Developers and Promoters (P.) Ltd. v. Principal Commissioner of Central Goods and Services Tax

Court: High Court of Delhi

Petition No.: W.P. (C) No. 13075 of 2023

Category of Dispute: Refund – Credit lying in non-migrated GSTIN

Date of Judgement: 01 March 2024

Relevant Sections: Not specifically mentioned; relates to transitional provisions and administrative functioning of GST portal

Facts of the Case [¶1–7]:

1. [¶1] The petitioner sought a refund of ₹16,19,838 deposited against a GSTIN (07AAACB0226C1ZJ) termed as a “non-migrated” number.
2. [¶2–3] The petitioner was registered under both VAT and Service Tax in the pre-GST regime. On GST rollout, it consciously migrated only its VAT registration, resulting in a single valid GSTIN: 07AAACB0226C2ZI.
3. [¶4–5] The petitioner was unaware that the service tax registration had also been automatically migrated by the system to another GSTIN (non-migrated), which it never used.
4. [¶6] Discovery of the non-migrated GSTIN happened when a client’s input tax credit was not reflecting under the active GSTIN.
5. [¶7] On search, ₹16,19,838 was found lying in the credit ledger of the unused (non-migrated) GSTIN. The petitioner sought refund or transfer of this amount to its active GSTIN.

Question(s) in Consideration [¶1, ¶7–8]:

• Whether the amount lying in the credit ledger of a GSTIN, created without the taxpayer’s active use or consent (non-migrated), can be refunded or transferred to the valid GSTIN actively used by the taxpayer?

Observation of the Court [¶8–11]:

1. [¶8] The respondent confirmed that no provision exists for such intra-GSTIN credit transfers on the portal but acknowledged that the service tax registration had been auto-migrated erroneously.
2. [¶9] The Court considered the factual peculiarities—i.e., lack of awareness, no use of the non-migrated GSTIN, and unintentional credit accumulation.
3. [¶10–11] It held that the credit of ₹16,19,838 should be transferred to the migrated GSTIN, and further directed CBIC to examine the issue of automatic migration of such GSTINs and resolve such portal-related errors in four weeks.

Judgement of the Court [¶9–14]:

1. [¶9] Ordered transfer of the amount from the non-migrated GSTIN to the valid migrated GSTIN.
2. [¶11] Directed CBIC to investigate the issue of automatic creation of inactive GSTINs and take corrective action.
3. [¶12–14] Scheduled reporting on compliance and instructed that the order be communicated to CBIC.

Between Fine Lines:

• The Court provided relief for GST credited to an inactive GSTIN due to portal error, emphasizing that administrative issues should not penalize taxpayers.
• It validated transfer of such credit to the operative GSTIN in the absence of express portal mechanism.
• The judgement pushes for systemic rectification of technical glitches on the GST portal.
• This ruling opens scope for similarly placed taxpayers to seek relief.
• The Court ensured administrative accountability by directing CBIC to act within a specific timeline.

Summary of Referred Cases:

Takeaway:

“Rectifying the Ghost of Auto-Migrated GSTINs: Credit Must Follow Conscious Use”subject