TMI Blog2021 (7) TMI 1370X X X X Extracts X X X X X X X X Extracts X X X X ..... AND SHRI RAGHWENDRA KUMAR SINGH, MEMBER PROCEEDINGS (Under section 101 of the Central Goods and Services Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017) 1) At the outset, we would like to make it clear that the provisions of both the CGST Act and the MPGST Act are mirror images of each other except for certain specific provisions. Therefore, unless a specific mention is made to such dissimilar provisions, a reference to the CGST Act would mean a reference to the similar provisions under the MPGST Act and vice-versa. At places we may refer it as GST Act. 2) The present appeal has been filed under section 100 of the Central Goods and Service Tax Act, 2017 and the Madhya Pradesh Goods and Services Tax Act, 2017 [hereinafter also referred to as the CGST Act and MPGST Act ] by M/s Jaideep Ispat And Alloys Pvt. Ltd. (hereinafter also referred to as the appellant ) against the order of Authority for Advance Ruling No. 01/2021 dated 18.01.2021. 3. BRIEF FACTS OF THE CASE i) The appellant M/s Jaideep Ispat And Alloys Pvt. Ltd, a company registered under the Companies Act (hereinafter referred to as 'the appellant') is registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds is carried out and approval is given thereafter. x) Invoice is recorded in the accounting software of the appellant. xi) Along with invoices, the consignment note (bilty) and e-way bill are kept in records. xii) GST compliance status of the vendor is verified (i.e. whether GSTR-1 and GSTR-3B returns are properly filed by the vendor). xiii) Input tax credit is availed by the appellant in GSTR-3B return filed by the appellant. Payment is made to the vendor (in some cases advance payment is made). 5. RULING PRONOUNCED BY AUTHORITY FOR ADVANCE RULING (AAR) It is ruled that the applicant's question, therefore, is technical/procedural in nature and is not covered by any of the clauses of Section 97(2) of the CGST Act, 2017, and it is outside the purview of Advance Ruling application and rejected as inadmissible , in terms of first provision to Section 98(2) of the CGST Act, 2017. 6. QUESTIONS RAISED BEFORE THE APPELLATE AUTHORITY FOR ADVANCE RULING (AAAR) The following question, which is the very same as posed before AAR, have been posed before the Appellate Authority: - Whether the procedure adopted and the documents/records maintained by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are directly used for the purpose of business. Further, the concerned inputs are not specifically included in the list of blocked credit as specified in Section 17 of the GST Acts. Therefore, subject to the fact that the procedural conditions for the claim of input tax credit are met, the input tax credit is generally admissible in respect of the concerned inputs. Hence, the eligibility of input 'tax credit is dependent on whether or not the procedural conditions are being complied with or not. vii) In this respect, appellant submits that the procedural conditions for the admissibility of input tax credit under Section 16(2) can be simply listed as follows: a. The appellant should be in possession of tax paying documents b. The appellant should have received the goods. c. The tax charged in respect of such supply should be paid. d. The appellant should have filed a return under Section 39. viii) The appellant submits that, if it can be established that sufficient compliance and documentary records are maintained, and all the procedural requirements are followed with as detailed below, then the input tax 'credit in respect of the concerned inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt of the concerned inputs. xv) The appellant is keeping the following records for this purpose: a. Firstly, as soon as the truck enters the premises of the appellant, a gate entry inward slip is generated by the system which shows the gate pass number, the date, vehicle number, invoice number, invoice date, lorry receipt (OR) number and date, as well as the details of the vendor, the description and the quantity of the concerned inputs in the consignment. The same is signed by the security guard and is generated in presence of the truck driver. b. Further, a photograph of the truck along with the driver thereof, clearly showing the vehicle number, is also clicked and kept in the records by the appellant as a further documentary evidence of actual receipt of the goods in the same vehicle as is mentioned on the documents. c. Immediately after the arrival of the vehicle in the premises, a weighment of the truck is conducted which shows the total gross weight and net weight, along with the date of weighment and the time of weighment. This slip serves as a corroborative document in addition to various other documents issued by the supplier showing the quantitative d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed. xviii) Appellant submits, that the payment of tax can be made by the vendor either by utilising the amount in electronic cash ledger or the amount available in the electronic credit ledger of the vendor. xix) Appellant submits, that on the electronic common GST portal, payment of tax is usually done on a self-assessment basis by way of filing return in form GSTR-3B. This is in accordance with Section 59 of the GST Acts which states that each taxpayer shall self-assess his own taxes and pay them in a return filed under Section 39. The said return is form GSTR-3B. Hence, it can be said that payment of taxes shall be done by the vendor by way of filing GSTR-3B return. xx) Appellant submits, that, in accordance with Rule 36(4), a condition is prescribed for availing the input tax credit, i.e. the total input, tax credit to be availed by a registered person in respect of those supplies for which details have not been uploaded in a return filed under Section 37 by the supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax due from his end. This would of course also include the tax charged in respect of the supplies made to the appellant: If the supplies made by the vendor to the appellant have been disclosed in the vendor's GSTR-1 and the vendor has also filed their GSTR-3B, it stands to reason that the vendor would have self-assessed their taxes and would have paid the same to the Government. Appellant claims that the condition for admissibility of input tax credit as mentioned in Section 16 of the GST Acts is clearly being fulfilled. xxiv) The appellant further submits that in this context , for a similar provision in the erstwhile VAT law, the Hon'ble High Court of Delhi had even said that input credit shall be admissible even if the supplier had not fulfilled his obligation under law. That, as per the decision of the Hon'ble High Court, the only obligation of the recipient is to produce an invoice which is generated by the supplier who is registered under the tax law and to check whether such supplier is properly registered under law. To expect the recipient to do anything more would be futile because it is not practically possible for any person engaged in business to car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for the purchasing dealer to ascertain the failure of the selling dealer to make a correct disclosure of the sales made in his return. Again, it is not as if the Department is helpless if the selling dealer commits a default in either depositing or lawfully adjusting the VAT collected from the purchasing dealer. There are provisions in the DVAT Act, referred to hereinbefore, which empower the Department to proceed to recover the tax in arrears from the selling dealer. There is also Section 40A, in terms of which, a purchasing dealer acting in connivance with a selling dealer can be proceeded against. Applying the law explained in the [above decisions], it can be concluded in the case that there is a singular failure by the legislature to make a distinction between purchasing dealers who have bona fide transacted with the selling dealer by taking all precautions as required by the DVAT Act and those that have not. Therefore, there was need to restrict the denial of ITC only to the selling dealers who had failed to deposit the tax collected by them and not punish bona fide purchasing dealers. The latter cannot be expected to do the impossible. It is trite that a law tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by input manufacturer - Credit availed by appellant sought to be reversed as duty - Precedents and C.B.E. C. Circular holding credit not deniable on default in duty payment by input manufacturer - Reasonable precautions taken by appellant before availing credit, invoices containing all particulars as prescribed in rules - Credit taken on bona fide belief of duty payment - Documents evidencing payment of excise duty amount to supplier by appellant - Precedents and C.B.E. C. Circular applicable- Cenvat credit admissible - Rules 3 and 4 of Cenvat Credit Rules, 2004. [paras 3, 4] Other conditions for claim of input tax credit xxviii) Appellant further submit that another condition for availing the input tax credit under Section 16(2) is that return under Section 39 is filed by the recipient. Appellant submit that, the return under Section 39 is GSTR-3B return, and that the input tax credit is claimed by them in the said return itself. Therefore, this condition is definitely being fulfilled for admissibility of input tax credit. xxix) Further, as per the second proviso to Section 16(2) - Provided further that where a recipient fails to pay to the supplier of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one asking for an interpretation of the said conditions, and to check whether the conditions as prescribed are being fulfilled or not. xxxv) That the Advance Ruling Authority should have observed that the fulfillment or otherwise of the condition is the very basis on which input tax credit becomes admissible hence it cannot be said that the question is procedural in nature. The question has only two possible answers - either the conditions for admissibility of input tax credit are fulfilled or the conditions for admissibility of input tax credit are not fulfilled. xxxvi) Appellant submits that the question would be termed as procedural if it was asking for the right procedure to be adopted in any given situation. That, such a question is not posed before the authority, only their opinion about the fulfillment of mentioned conditions was asked. 8. PERSONAL HEARING The appellant was given an opportunity of personal hearing on 20.07.2021 through virtual mode. The appellant was heard through Shri Pradeep Asawa, Chartered Accountant. After hearing the appellant has expressed his satisfaction through a letter and asked for decision. 9. DISCUSSION AND FINDI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e time of personal hearing, the authorized representative on behalf of the appellant argued that no investigation is pending against M/s Jaideep Ispat and Alloys Pvt Ltd (GSTIN: 23AABCJ4896R4ZQ). Rathi Iron and Steel's old GSTIN is 23AACCR2011B2ZD which was merged due to amalgamation with Jaideep Ispat and Alloys Pvt Ltd. On going through the records available before us, we find that according to the submission made by circle in-eharge of Circle-3 Commercial Tax Department SGST Indore, vide letter dated 6-1-2021 and dated 8-1-2021, that the advance ruling application was made by GSTIN-23AABCJ4896R4ZQ having legal name- Jaideep Ispat And Alloys Pvt. Ltd and the same company is having another unit namely M/s. Jaideep Ispat And Alloys Pvt. Ltd., Unit-II having another GSTIN Number-23AABCJ4896R2ZS. It was also informed that an adjudication has been made in respect of M/S Jaideep Ispat And Alloys Pvt. Ltd., Unit-II GSTIN Number- 23AABCJ4896R2ZS and demand has also been raised against the appellant. That many points raised by the appellant in the application before the Advance Ruling Authority were considered during the adjudication proceedings. Now it is imperative to ascertain w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the question raised in the application is already pending or decided in any proceedings in case of an applicant under any of provisions of this Act. The question raised by the appellant before us was investigated and adjudicated upon by the Circle-3, Commercial Tax Department (SGST), Indore. We find that Advance Ruling Authority has rightly rejected the appellant's application as per the first proviso to section 98(2) of CGST Act, 2017. iii). Now, we will look into Section 100(1) pf the CGST, Act, 2017 which is reproduced below: (1) The concerned officer, the jurisdictional officer or an applicant aggrieved by any advance ruling pronounced under sub-section (4) of section 98, may appeal to the Appellate Authority. Here we find that section 100(1) mandates that only a ruling pronounced ender sub-section (4) of section 98 of CGST, Act, 2017 can be appealed before the Appellate Authority for Advance Ruling. We find that the Advance Ruling Authority in its Order No.01/2021 has rejected the application of the appellant under section 98(2) of CGST, Act, 2017, and it cannot be said to be any advance ruling pronounced under sub-section (4) of section 98 of CGST, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
