Navigating Seamless Inter-State ITC Transfers Under GST: Judicial Guidance

Introduction

The non-transferability of Input Tax Credit ('ITC') amongst states has long been the point of debate between legal intent and technical feasibility. In a country aspiring for unified taxation scheme, this barrier has translated into stranded ITCs, blocked working capital, and has been a hurdle for the post-merger continuity of business. In a significant ruling, the Hon'ble Bombay High Court (Goa Bench), in the case of Umicore Autocat India Pvt. Ltd. v. Union of India & Ors. [2025 (7) TMI 1188 – Bombay HC], has taken a significant step in clarifying the transfer of unutilized ITC during business restructuring. This judgment not only clarifies the legal position on interstate ITC transfer but also addresses the technical and administrative hurdles posed by the GST Network (GSTN) portal.