2025 (6) TMI 1232 - AAR - GST

Entitlement to avail ITC - import IGST paid through TR-6 Challan in terms of Section 16 (2) of the CGST Act read with rule 36 of CGST Rules - import IGST paid vide TR-6 Challan is subject to the time limit prescribed under Section 16 (4) of the CGST Act or not - import IGST paid vide re-assessed bill of entry is subject to the time limit prescribed under Section 16 (4) of the CGST Act or not - time limit for availing ITC would begin from the initial date of bill of entry originally filed or from the date of re-assessment of bill of entry or not. Whether the applicant can avail Input Tax Credit (ITC) of import IGST paid through TR-6 Challan under Section 16(2) of the CGST Act read with Rule 36 of the CGST Rules? - HELD THAT - A TR-6 challan cannot be considered as a document for the purpose of availment of ITC in the present GST scenario. It is to be noted that under the pre-GST era Rule 9 of the CENVAT Credit Rules 2004 challans were indeed identified as documents for the purpose of availment of credit. Whereas in present scenario involving GST the challan or TR-6 challan as the case may be is conspicuously absent in the list of documents prescribed for availment for ITC under Rule 36 of the CGST Rules 2017. The applicant ought to have resorted to Bill of Entry-wise re-assessment which in turn could have paved the way for a seamless availment of ITC based on the bills of entry which figures as one of the prescribed and a legally valid document for availment of ITC. Under the circumstances of the instant case it is unable to comment on the aspect relating different assessment practices reportedly adopted by the respective Customs formations viz. Chennai Sea Customs Air Cargo Customs and J Matadee FTWZ as the same is beyond the purview of the Authority for Advance Ruling and it is the look-out of the applicant to get the Bill of Entry-wise re-assessment done with the respective Customs authorities. Accordingly neither a TR-6 challan as such nor a TR-6 challan read with the SVB order and letters issued by the tax authorities as claimed by the applicant can be considered as an eligible document for the purpose of availment of ITC. Whether the eligibility to avail ITC of the import IGST paid vide TR-6 Challan is subject to the time limit prescribed under Section 16 (4) of the CGST Act? - HELD THAT - This query need not be answered having already held that TR-6 challan as such or a TR-6 challan read with the SVB order and letters issued by the tax authorities cannot be considered as an eligible document for the purpose of availment of ITC. Whether the eligibility to avail ITC of the import IGST paid under the re-assessed bill of entry is subject to the time limit prescribed under Section 16 (4) of the CGST Act? - HELD THAT - Section 16 (4) of the CGST Act 2017 prescribes the time limit for availment of ITC discusses only about an invoice or a debit note without making reference to any other document. However it may be seen that apart from a tax invoice and a debit note the provisions of Section 16 (2) of the CGST Act 2017 recognises such other tax paying documents as may be prescribed as well - Accordingly the Bill of Entry figures as one of the prescribed document for the purposes of availment of ITC under rule 36 (1) (d) of the CGST Rules 2017. As a result availment of ITC based on a Bill of entry becomes eligible to the applicant irrespective of the fact whether it is re-assessed or original. However it is to be noted that if the re-assessment happens to be a fall-out of an audit or an anti-evasion operation involving fraud wilful misstatement suppression of facts etc. an embargo exists in relation to ITC availment on the same as provided under Rule 36 (3) of the CGST Rules 2017. The provisions of 16 (4) of the CGST Act 2017 that prescribes the time frame for availment of ITC refers just to an invoice or a debit note in view of the fact that the levy enabled under Section 9 of the Act ibid is only in respect of intra-state supplies of goods or services or both. Further it is to be noted that only an invoice or a debit could be related to an intra-state supply and not a Bill of Entry which is relatable only to import of goods involving payment of taxes under IGST and which document does not relate to intra-state supplies in any manner whatsoever - by virtue of Section 20 of the IGST Act 2017 whereby the provisions of CGST Act 2017 becomes applicable mutatis mutandis in relation to Integrated tax it is inferred that the time limit prescribed under the provisions of Section 16 (4) of CGST Act 2017 applies in equal measure to the availment of ITC based on a Bill of Entry in relation to Integrated taxes as much as it applies to availment of ITC based on an invoice or debit note in relation to Central tax. The time limit prescribed under Section 16 (4) of the CGST Act 2017 has been structured in such a way that no ITC could be availed after the thirtieth day of November following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return whichever is earlier . The aforesaid style of phrasing is peculiar to this provision as compared to various other provisions of the Act ibid where the time limit is expressed in simple terms like 30 days 90 days 180 days three months three years five years etc. Whereas the time limit for availing ITC is ideally fastened to the furnishing of annual return or with a specific day viz. the thirtieth day of November following the end of financial year which indicates that the entire scheme of ITC availment which starts with the periodical monthly returns should come to an end by the time the annual return is filed or finalised by the thirtieth day of November following the end of financial year whichever is earlier - availment of ITC on the basis of a bill of entry whether original or re-assessed is governed by the time limit as prescribed under Section 16 (4) of the CGST Act 2017. Whether the time limit for availing ITC would begin from the initial date of bill of entry originally filed or from the date of re-assessment of bill of entry? - HELD THAT - If the payment of differential duties of customs is a fall-out of the SVB order and letters issued by the tax authorities as discussed in the instant case we reckon that the time limit for availing ITC would ideally begin from the date of re-assessment of bill of entry as the payment of differential duties of customs including IGST interest thereon etc. is necessitated only when an upward price revision takes place at a later date. Conclusion - i) Neither a TR-6 challan as such nor a TR-6 challan read with the SVB order and letters issued by the tax authorities as claimed by the applicant in the instant case can be considered as an eligible document for the purpose of availment of ITC. ii) As TR-6 challan cannot be considered as an eligible document for the purpose of availment of ITC the question of answering this query does not arise. iii) Availment of ITC on import IGST on the basis of a re-assessed bill of entry is very much governed by the time limit as prescribed under Section 16 (4) of the CGST Act 2017. iv) The time limit for availing ITC on the differential IGST paid would begin from the date of re-assessment of bill of entry.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this Advance Ruling application are:

(i) Whether the applicant can avail Input Tax Credit (ITC) of import IGST paid through TR-6 Challan under Section 16(2) of the CGST Act read with Rule 36 of the CGST Rules?

(ii) Whether eligibility to avail ITC of import IGST paid via TR-6 Challan is subject to the time limit prescribed under Section 16(4) of the CGST Act?

(iii) Whether eligibility to avail ITC of import IGST paid via a re-assessed Bill of Entry (BOE) is subject to the time limit prescribed under Section 16(4) of the CGST Act?

(iv) If the answer to question (iii) is affirmative, whether the time limit for availing ITC begins from the original date of the BOE or from the date of re-assessment of the BOE?

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Eligibility to avail ITC on import IGST paid through TR-6 Challan

Relevant legal framework and precedents: Section 16(2)(a) of the CGST Act requires possession of a tax invoice, debit note, or such other tax paying documents as prescribed for availing ITC. Rule 36(1)(d) of the CGST Rules allows ITC on the basis of a Bill of Entry or any similar document prescribed under the Customs Act for assessment of IGST on imports. The term "similar document" is interpreted broadly to include documents resembling a Bill of Entry used for assessment purposes, including re-assessments.

Pre-GST precedents under CENVAT Credit Rules, such as CCE Vs Essel Propack Ltd, Sambhaji Vs Gangabai, and others, held that procedural technicalities should not defeat substantive rights to credit when tax is paid. The Supreme Court in UOI Vs Cosmo Films Ltd emphasized the GST regime's intent to eliminate cascading taxes and facilitate ITC.

Court's interpretation and reasoning: The applicant argued that TR-6 Challan, used for payment of differential customs duties including IGST as per SVB orders and Customs authorities' directions, should be treated as a valid tax paying document for ITC. TR-6 challan contains details of payment purpose, importer, and authority, and is recognized in pre-GST regimes for credit purposes.

The authority examined the statutory language and noted that Rule 36(1)(d) confines ITC eligibility to Bills of Entry or similar documents prescribed under the Customs Act. TR-6 Challan, though a payment document, is not prescribed under the Customs Act as a document for assessment of IGST on imports. The Circular No. 16/2023-Cus by CBIC clarified that TR-6 Challan is not a prescribed document for ITC in the GST regime.

Key evidence and findings: The applicant's payment of differential duties via TR-6 Challan was voluntary and pursuant to SVB orders and Customs letters. However, the Customs authorities at different ports adopted different practices: Chennai Sea Customs issued re-assessed BOEs, while Chennai Air Cargo and FTWZ directed payment via TR-6 Challans.

Application of law to facts: The authority found that while ITC on IGST paid via re-assessed BOE is permissible, TR-6 Challan, even read with SVB orders and Customs letters, is not an eligible document for ITC under the current GST legal framework. The absence of TR-6 Challan in the prescribed list under Rule 36(1)(d) and the CBIC circular's clarification were decisive.

Treatment of competing arguments: The applicant's reliance on pre-GST precedents and the substantive right to ITC was acknowledged. However, the authority emphasized the changed legal regime under GST, where transmission of duty payment details to GSTN via prescribed documents is essential for ITC. The procedural difference in Customs practices across ports was noted but held beyond the authority's jurisdiction.

Conclusion: TR-6 Challan, alone or with SVB order and Customs letters, cannot be considered a valid document for availing ITC of import IGST.

Issue (ii): Applicability of time limit under Section 16(4) to ITC on import IGST paid via TR-6 Challan

Relevant legal framework: Section 16(4) of the CGST Act prescribes a time limit for availing ITC only in respect of invoices or debit notes for supply of goods or services.

Court's reasoning: Since TR-6 Challan is not a tax invoice or debit note, and not an eligible document for ITC, the question of applicability of Section 16(4) to TR-6 Challan does not arise.

Conclusion: The time limit under Section 16(4) is not applicable to ITC claimed on the basis of TR-6 Challan.

Issue (iii): Applicability of time limit under Section 16(4) to ITC on import IGST paid via re-assessed Bill of Entry

Relevant legal framework: Section 16(2)(a) allows ITC on possession of tax invoice, debit note, or other prescribed tax paying documents. Rule 36(1)(d) specifically includes Bill of Entry or similar documents prescribed under Customs Act for assessment of IGST on imports. Section 16(4) prescribes a time limit for ITC on invoices or debit notes but is silent on Bills of Entry.

The IGST Act Section 20 applies CGST provisions mutatis mutandis to IGST, including ITC provisions.

Court's interpretation and reasoning: The authority recognized that Bill of Entry is a distinct document from invoice or debit note, relating to import clearance rather than intra-state supply. However, since Bill of Entry is a prescribed document for ITC under Rule 36(1)(d), ITC on import IGST paid via re-assessed Bill of Entry is eligible.

Regarding the time limit, the authority held that the time limit under Section 16(4) applies to ITC claimed on Bill of Entry, by virtue of the mutatis mutandis application of CGST provisions to IGST under Section 20 of IGST Act. The absence of explicit mention of Bill of Entry in Section 16(4) does not exempt it from the time limit, as a reasonable limitation period must apply to legally enforceable claims.

Precedents under Central Excise law and Supreme Court rulings on limitation principles were cited to support the imposition of a reasonable time limit even where not explicitly prescribed.

Key evidence and findings: The applicant's re-assessed Bill of Entry arises from transfer pricing adjustments and SVB orders, with upward revision of import price and consequent differential customs duties including IGST.

Application of law to facts: The authority concluded that ITC on import IGST paid via re-assessed Bill of Entry is governed by the time limit under Section 16(4) of the CGST Act.

Treatment of competing arguments: The applicant's argument that the time limit should not apply to Bill of Entry was rejected based on statutory interpretation and policy considerations.

Conclusion: ITC on import IGST paid via re-assessed Bill of Entry is subject to the time limit prescribed under Section 16(4) of the CGST Act.

Issue (iv): Commencement of time limit for ITC on re-assessed Bill of Entry

Relevant legal framework and precedents: Section 16(4) refers to time limit from the date of invoice or debit note. The Bill of Entry is not an invoice or debit note but a prescribed document for ITC. The right to ITC crystallizes only upon payment of tax. Supreme Court precedents on limitation principles establish that limitation runs from the date the right accrues.

Court's interpretation and reasoning: Since the re-assessed Bill of Entry arises from upward price revision and differential duty payment at a later date, the right to claim ITC on such differential IGST crystallizes only from the date of re-assessment and payment.

It would be impractical and illogical to start the limitation period from the original BOE date, as the differential duty was not payable then and could not be anticipated.

Application of law to facts: The authority held that the time limit for availing ITC on differential IGST paid under re-assessed BOE begins from the date of re-assessment of the BOE.

Treatment of competing arguments: The applicant's submissions on commencement of limitation from re-assessment date were accepted.

Conclusion: The time limit for availing ITC on differential import IGST paid begins from the date of re-assessment of the Bill of Entry.

3. SIGNIFICANT HOLDINGS

The Authority ruled as follows:

On TR-6 Challan as a document for ITC: "Neither a TR-6 challan as such, nor a TR-6 challan read with the SVB order and letters issued by the tax authorities, as claimed by the applicant in the instant case can be considered as an eligible document for the purpose of availment of ITC."

On time limit applicability to TR-6 Challan: "As TR-6 challan cannot be considered as an eligible document for the purpose of availment of ITC, the question of answering this query does not arise."

On ITC on import IGST paid via re-assessed Bill of Entry: "Availment of ITC on import IGST on the basis of a re-assessed bill of entry, is very much governed by the time limit as prescribed under Section 16 (4) of the CGST Act, 2017."

On commencement of time limit for ITC on re-assessed Bill of Entry: "The time limit for availing ITC on the differential IGST paid would begin from the date of re-assessment of bill of entry."

Core principles established include the strict interpretation of prescribed documents for ITC under GST, the non-inclusion of TR-6 Challan as a valid document for ITC, the applicability of the time limit under Section 16(4) to ITC claimed on Bills of Entry, and the logical commencement of limitation period from the date of re-assessment and payment of differential duties rather than the original import date.