2025 (6) TMI 919 - AAR - GST

Time limit of availing ITC mentioned in Section 16 (4) of CGST Act 2017 as applicable on ITC eligible as per Bill of Entry - applicant can avail this IGST paid as per bill of entry in the next GSTR3B or not - HELD THAT - Sections 16 (4) aims to ensure timely ITC claims prevent indefinite carry forward of credits and maintains fiscal discipline. This intent could apply to all forms of ITC including IGST on imports regardless of the tax paying documents. Since ITC in respect of all types intra-state or inter-state supply is governed by section 16 of the CGST Act all conditions under section 16 including the time limitation apply uniformly to all types of ITC. Hence the condition of time limitation provided by section 16 (4) is applicable to the transactions of IGST paid on imports. GST Act provides for self-assessment and filing of GST returns based on such self-assessment and making tax payments as per liability shown in these returns. For harmonious operation of GST laws timelines have been provided for filing of all types of returns ITC availment filing GST refund claims etc. Similarly timelines are also provided to officers for granting registrations scrutiny of returns grants of refunds audit or adjudications etc. These timelines are also important as one aspect depends on the other - Further scrutiny reconciliation or audit is in respect of filings of a particular financial year. If there is no time limit for filing of all the claims including availment of ITC then there would not be possibility of reconciling or scrutinizing or auditing them within the timelines provided for these activities. Hence GST law has to be interpreted in a way that allows harmonious working of various provisions of law. Thus the term invoice in section 16 (4) is to be interpreted to include any document evidencing tax payment such as a Bill of Entry. Conclusion - i) The time limit of availing ITC as mentioned in Section 16 (4) of CGST Act 2017 is applicable on ITC eligible as per Bill of Entry. ii) The applicant cannot avail this IGST paid as per bill of entry in the next GSTR-3B.

Summary

The core legal questions considered by the Authority for Advance Ruling (AAR) in this matter are:

1. Whether the time limit for availing input tax credit (ITC) as prescribed under Section 16(4) of the Central Goods and Services Tax (CGST) Act, 2017 applies to ITC eligible on the basis of the Bill of Entry in case of imported goods.

2. Whether the applicant can avail the IGST paid on import of goods as per the Bill of Entry in the subsequent GSTR-3B return after the prescribed time limit has elapsed.

Issue-wise Detailed Analysis

Issue 1: Applicability of Time Limit under Section 16(4) of CGST Act to ITC on Bill of Entry

Relevant Legal Framework and Precedents:

Section 16 of the CGST Act, 2017 governs the eligibility and conditions for availing ITC. Subsection (4) of Section 16 prescribes a strict time limit for availing ITC, which is the earlier of the 30th November following the end of the financial year to which the invoice or debit note pertains or the date of furnishing the relevant annual return.

Section 16(2)(a) requires possession of a tax invoice or debit note or "such other tax paying documents as may be prescribed" to avail ITC. Rule 36(1)(d) of the CGST Rules, 2017 prescribes the Bill of Entry or any similar document under the Customs Act, 1962 as an eligible document for claiming ITC on imported goods.

Section 20(iv) of the IGST Act, 2017 provides that, subject to its provisions, the provisions of the CGST Act relating to ITC shall apply mutatis mutandis to the IGST Act. Thus, the CGST provisions on ITC, including Section 16(4), apply to IGST on imports.

Court's Interpretation and Reasoning:

The applicant argued that Section 16(4) refers only to invoices or debit notes and does not explicitly mention Bill of Entry; hence, the time limit should not apply to ITC on Bill of Entry. They contended that Bill of Entry, being a prescribed tax paying document under Rule 36(1)(d), should be exempt from the time limit in Section 16(4).

The jurisdictional officer and the AAR rejected this narrow interpretation, emphasizing that the Bill of Entry effectively functions as a tax invoice for imports. The Bill of Entry contains all the particulars required of a tax invoice under Section 31 of the CGST Act and Rule 46, including description, quantity, value of goods, tax charged, GSTIN of importer, and other relevant details.

The AAR reasoned that the purpose of Section 16(4) is to ensure timely availment of ITC, prevent indefinite carry forward, and maintain fiscal discipline. Allowing an exception for Bill of Entry would undermine this intent and disrupt the harmonious operation of GST laws, including timelines for filing returns, claiming refunds, and conducting audits.

Further, the AAR noted that Section 20(iv) of the IGST Act mandates the application of CGST provisions mutatis mutandis to IGST, and the concept of mutatis mutandis does not permit extending or restricting the scope beyond what is originally intended by the legislature. Therefore, the time limit under Section 16(4) applies equally to ITC on IGST paid on imports evidenced by Bill of Entry.

Key Evidence and Findings:

The Bill of Entry submitted by the applicant contained all prescribed particulars of a tax invoice, including importer details, HSN code, quantity, value, IGST amount, and date. The IGST was paid and reflected in GSTR-2A and GSTR-2B for the relevant periods.

The applicant failed to claim ITC in GSTR-3B for the financial year 2022-23 and also did not claim it by the deadline of 30th November 2023.

Application of Law to Facts:

Given that the Bill of Entry qualifies as a tax invoice under the GST framework, and Section 16(4) applies uniformly to all ITC claims, the time limit for availing ITC applies to the IGST paid on imports as well. The applicant's failure to claim ITC within the prescribed time renders the credit inadmissible.

Treatment of Competing Arguments:

The applicant's argument that the Bill of Entry is not explicitly mentioned in Section 16(4) was acknowledged as a possible drafting oversight. However, the AAR held that such omission cannot be construed to exclude Bill of Entry from the ambit of Section 16(4), as this would conflict with the legislative intent and the principle of uniform application of ITC provisions.

The mutatis mutandis application of CGST provisions to IGST was interpreted strictly, disallowing any expansion of scope beyond what is prescribed.

Conclusion:

The time limit for availing ITC under Section 16(4) of the CGST Act applies to ITC on IGST paid on imports evidenced by Bill of Entry. The applicant cannot claim ITC beyond the prescribed deadline.

Issue 2: Availability of IGST Credit in Subsequent GSTR-3B Return

Relevant Legal Framework and Precedents:

Section 16(4) of the CGST Act, 2017 sets the cut-off date for availing ITC. GSTR-3B is the monthly return where taxpayers declare their ITC and tax liabilities. The applicant's failure to claim ITC in GSTR-3B for the relevant periods and by the statutory deadline is central to this issue.

Court's Interpretation and Reasoning:

Since the time limit under Section 16(4) applies to ITC on IGST paid on imports, the applicant cannot avail the IGST credit in any subsequent GSTR-3B return after the deadline. The AAR emphasized the importance of compliance with timelines to maintain fiscal discipline and efficient administration of GST laws.

Key Evidence and Findings:

The IGST credit was reflected in GSTR-2A and GSTR-2B but was not claimed in GSTR-3B for FY 2022-23 or by the deadline of 30th November 2023. The applicant only sought to claim the credit after receiving a departmental communication in March 2024.

Application of Law to Facts:

The applicant's delay in claiming ITC beyond the stipulated timeline precludes the availment of such credit in subsequent returns.

Treatment of Competing Arguments:

The applicant's plea of oversight was noted but not accepted as a valid ground to extend the time limit for claiming ITC.

Conclusion:

The applicant is not entitled to avail the IGST credit in the next or any subsequent GSTR-3B return after the expiry of the time limit prescribed under Section 16(4).

Significant Holdings

"Section 16(4) of the CGST Act, 2017 is applicable to input tax credit on IGST paid on imports evidenced by Bill of Entry, as the Bill of Entry carries all particulars required of a tax invoice under Section 31 and Rule 46."

"The provisions of Section 16(4) apply uniformly to all forms of input tax credit, including IGST on imports, to ensure timely availment, prevent indefinite carry forward, and maintain fiscal discipline."

"The concept of mutatis mutandis under Section 20(iv) of the IGST Act, 2017 does not permit exclusion of Bill of Entry from the ambit of Section 16(4) of the CGST Act, 2017."

"Since the due date for availment of ITC on imported goods has elapsed, the taxpayer is not eligible to claim such ITC in subsequent returns."

Final determinations:

1. The time limit prescribed under Section 16(4) of the CGST Act, 2017 applies to ITC on IGST paid on imports evidenced by Bill of Entry.

2. The applicant cannot avail the IGST credit in the next or any subsequent GSTR-3B return after the expiry of the prescribed time limit.