Bombay High Court Directs GST Council To Develop Mechanism For Cross-State ITC Transfer In Mergers/Amalgamations

The Bombay High Court has directed the "GST Council and GST Network to develop a mechanism for cross-state ITC (Input Tax Credit) transfer in mergers/amalgamations." The court observed that current GST rules lack a clear provision for the transfer of unutilized Input Tax Credit from one state to another when companies undergo mergers, amalgamations, or demergers. To prevent hardship to businesses undergoing such restructuring, the court mandated the GST authorities to devise a specific, streamlined system for such inter-state ITC transfers.