Section 16(2) vs 16(4), Goods and Services Tax - GST

[NARENDER YARRAGORLA]

Is section 16(2) of CGST act overriding section 16(4) of CGST act?

Posts / Replies

[Shilpi Jain]

What i generally understand is that 'notwithstanding' comes into play when there is a contrary provision and not when there is an additional condition. I see s 16(4) as an additional condition. Hence 16(2) does not override s 16(4). Both have to be fulfilled.

[KASTURI SETHI]

Madam Shilpi Jain,

Thanks a lot for your clear-cut view.

[Ganeshan Kalyani]

Sri Alkesh Ji is trying to say that condition of Sec 16(2) is first need to be fulfilled and thereafter the provision of Sec 16(4). So in one way sec 16(2) is overriding sec 16(4).

Sri Alkesh Ji, I have made wild guess. I may be wrong. Thanks.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

With due respect to you and Sh.Alkesh Jani Ji both. What do you mean by "in one way' ? Either come this way or that way. 'One way' has no room here. Either yes or no. When we say one Section overrides another Section, it will override on the whole.. There is no sub-way. Our destination is one and only one. Whether we are able to reach there ? That is the question in this situation. No question of 'route'. We cannot force any person to agree.

Anyhow, all ideas should be welcomed because each idea which is off beat teaches me new line of thinking. To agree or not agree remains open-ended.

[SHARAD ANADA]

1) Rainbow Infrastructure Private Limited & Anr. Vs.Assistant Commissioner, State Tax, Goods and Service Tax, Barrakpore Zone & Ors

Plea challenging Section 16(4) of the CGST Act for denying ITC if not claimed within due date of Furnishing of Return: Calcutta HC issues notice

2) M/S SURAT MERCANTILE ASSOCIATION & 5 other(s) Versus UNION OF INDIA & 2 other(s) - 2021 (1) TMI 1096 - GUJARAT HIGH COURT

Writ Petition challenging Provision for Input Tax Credit under GST: Gujarat High Court issues notice to Govt

The appellant, Surat Mercantile Association challenged the constitutional validity of Section 16(4) of the GST Act, 2017 on the ground of being manifestly arbitrary and violative of Articles 14, 19(1)(g) and 300A respectively of the Constitution.

[Satish Talnikar]

Dear Sirs,

One of the conditions of Section 16 (2) is filing of return under Section 39 i.e. GSTR-3B. The does not prohibit belated filing of GSTR-3B albeit with late fee and interest. Thus, if a tax payer, for some genuine reason, say due to financial crisis, is unable to pay the tax liability in cash and therefore, cannot file his GSTR-3B returns for whole of the financial year and files the same only after the cut-off date specified under Section 16 (4), he should be allowed to avail ITC for all the relevant months from April to March while filing the returns since it is only when he files GSTR-3B reeturns, he becomes entitled to the ITC. The law does not permit to file the return unless the entire tax liability in the return is paid. Thus, even if the tax payer wishes to avail the ITC, he is prevented from doing so. Since Section 16 (2) starts with non-obstante clause, it will have an overriding effect on Section 16 (4). In my humble opinion, Section 16 (4) is applicable only in situations where the tax payer has not availed ITC in spite of having filed GSTR-3B return. In that case, he is allowed, as per Section 16 (4), to defer availment till the specified cut off date. In short, provisions of Section 16 (4) are for deferment of availing of ITC after filing of the returns.

Kindly provide views on the above.

[ANUP BHATTACHARJEE]

Credit is taken in the month itself but return in form 3B is filed after 16(4) limitation by paying late fee . In this senerio what will happen sir?

[CA.Tarun Agarwalla]

Yes , section 16(2) and section 16(4) appears to be separate conditions and independent of each other unless and until they contradict each other. Further section 16(4) applicability and validity is separate question altogether. Section 16(4) talk abily due date of return , where claim of credit have been made in the book of accounts and returns were filed belatedly, after the due date wether or not ITC is available? Is the question which yet to be scrutinised.

[KASTURI SETHI]

Query at serial no.22 dated 13.3.22 above has also been asked separately against Issue ID 117857 by the querist..

In this case, the return has been filed late and the department will issue SCN. However, on the basis of timely entry in the books of account ( being statutory records), relief can be hoped through Courts only. There is no other way-out. The querist has Hobson's choice.