TMI Blog2021 (4) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... ined reading of the definition of debit note , sub-section (3) of Section 34 of the CGST Act, 2017 and the particulars to be provided in a debit note issued under GST, it is amply clear that the debit note is not an independent document or an invoice in itself and is connected to an invoice as it is issued in pursuance to change in value of an invoice. It, therefore, follows that the financial year to which a debit note pertains, is invariably the financial year in which the original invoice (related to the said debit note) was issued - in light of the provisions of amended sub-section(4) of Section 16 of the CGST Act, 2017(amended w.e.f. 01.01.2021), it is concluded that the applicant shall be entitled to claim the input tax credit only in respect of debit notes issued by the supplier towards the transactions entered into and goods supplied to the applicant during the financial year 2018-19, on or before the due date of furnishing of the return under section 39 for the month of September following the end of the said financial year 2018-19 or furnishing of the relevant annual return, whichever is earlier. - GUJ/GAAR/R/10/2021 - - - Dated:- 20-1-2021 - SANJAY SAXENA AND MOHIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assification of the product in question under Customs Tariff Act, 1975; that the Customs Tariff is generally based on the tariff classification adopted by World Customs Organisation in its Harmonized Commodity Description of Coding System (hereinafter referred to as HSN ). Hence, wherever a Chapter of Customs Tariff is aligned with the corresponding Chapter of HSN, then the HSN explanatory notes explaining the scope of headings of that Chapter would have persuasive value in the determination of scope of headings of correspondence Chapter of Central Excise Tariff. The aforesaid position has been laid down by the Hon ble Supreme Court in the following decisions: (a) Camlin limited vs. CCE-2008 (230) ELT 193 (SC). (b) Coen Bharat Limited vs. CCE-2007 (217) ELT 165 (SC). (c) CCE vs. Bakelite Hylam Limited-1997 (91) ELT 13 (SC). 4. The applicant has further submitted there is ample jurisprudence available wherein it was held that for classification of goods, harmonized system of nomenclature is a safe and internationally accepted base; that in Collector of Central Excise Shillong vs. Wood Crafts Pvt. Ltd. (1995) 3 SCC 454, it was held by the Apex Court that: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys other than Electronic Goods under Tariff Heading 9503 attracting CGST 6% and SGST 6%; that it is apparent that toys manufactured by the applicant being essentially made of plastic fall under Tariff Heading 9503 00 30 and attract CGST 6% and SGST 6%. Therefore, the applicant has requested the Advance Ruling Authority that Plastic Toys other than Electronic Toys manufactured and supplied by the applicant may be held to be classifiable under Tariff Heading 9503 00 30 attracting CGST 6% and SGST 6%. 6. As regards the claim of Input Tax Credit, the applicant has submitted that the supplier of the applicant is seeking to issue debit notes in relation to transactions entered into and goods supplied to the applicant during the period 2018-19; that the debit notes proposed to be issued are in relation to price variation as the supplier had mistakenly charged low price and the said error was noticed by the supplier recently and hence, the supplier desires to rectify the same and proposes to issue debit notes to the applicant whereby CGST and SGST shall be reflected separately. The applicant has further submitted that recently amendment in sub-section 4 of Section 16 has been proposed w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to similar provisions of the GGST Act. 10. Based on the submission of the applicant as well as the arguments/discussions made by the representative of the applicant during the course of personal hearing, we find that there are two issues to be decided i.e. (i) the classification of their product Plastic Toys (ii) Whether applicant can claim input tax credit of CGST-SGST charged separately in debit notes issued by the supplier in current financial year of 2020-21 towards transactions for the period 2018-19. We will first determine the classification of the aforementioned product of the applicant but before doing that, we will be required to refer to the Notification No.01/2017-Central Tax (Rate) dated 28.06.2017 containing the headings, sub-headings as well as the rates of Central Tax GST applicable to various goods which are covered under 6 schedules as under: (i) 2.5 per cent. in respect of goods specified in Schedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 4202, 4303 or 4304; (e) sports clothing or fancy dress, of textiles, of Chapter 61 or 62; (f) textile flags or bunting, or sails for boats, sailboards or land craft, of Chapter 63; (g) sports footwear (other than skating boots with ice or roller skates attached) of Chapter 64, or sports headgear of Chapter 65; (h) walking-sticks, whips, riding-crops or the like (heading 6602), or parts thereof (heading 6603); (ij) unmounted glass eyes for dolls or other toys, of heading 7018; (k) parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV), or similar goods of plastics (Chapter 39); (l) bells, gongs or the like of heading 8306; (m) pumps for liquids (heading 8413), filtering or purifying machinery and apparatus for liquids or gases (heading 8421), electric motors (heading 8501), electric transformers (heading 8504), discs, tapes, solid-state non-volatile storage devices, smart cards and other media for the recording of sound or of other phenomena, whether or not recorded (heading 8523), radio remote control apparatus (heading 8526) or cordless infrared remote control devices (heading 8543); (n) sports vehicles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of payment (sub-heading 9504 30). 13. As per the submission of the applicant, Chapter Heading No.9503 of the Customs Tariff Act, 1975 covers toys of various kinds for children; that Tariff Item Nos.9503 00 10, 9503 00 20 and 9503 00 90 cover toys made of wood, plastics and metals; that Tariff Item No.9503 00 90 is the residual entry under which other toys for children of similar nature (but not made of metal, wood or plastics) can be classified; that therefore, the applicant s product i.e. Plastic toys, which are essentially made of plastic, should be classified under Tariff Item No.9503 00 30 itself. 14. We have gone through the relevant Heading 9503 as well as the Chapter Notes pertaining to Chapter 95 of the First Schedule to the Customs Tariff Act, 1975 which covers various kinds of toys for children such as Tricycles, scooters, pedal cars and similar wheeled toys, dolls' carriages, dolls, other toys, reduced-size ( scale ) models and similar recreational models, working or not as well as puzzles of all kinds. We have also seen the pictures/photographs of some of the Plastic toys given by the applicant alongwith their submission as well as some of the samples of to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -21 towards transactions for the period 2018-19. As per the submission of the applicant, the supplier of the applicant is seeking to issue debit notes in relation to transactions entered into and goods supplied to the applicant during the period 2018-19 and the debit notes proposed to be issued are in relation to price variation as the supplier had mistakenly charged low price and the said error was noticed by the supplier recently and hence, the supplier desires to rectify the same and proposes to issue debit notes to the applicant whereby CGST and SGST shall be reflected separately. The applicant has further submitted that recently amendment in sub-section 4 of Section 16 has been proposed which has done away with the condition of invoice to debit note correlation; that the earlier language using the words invoice relating to such before the words debit note pertains have been omitted vide the Finance Act, 2020 No.12 of 2020 and such amendment has received assent of the Honorable President on 27.03.2020; that the applicant believes that the law has been amended and has been made more simple so as to enable the assessee to claim Input Tax Credit of past periods also where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, as per the submission of the applicant, the aforementioned amendment has received assent of the President of India on 27.03.2020. We have, therefore, gone through the relevant portion of sub-section(4) of Section-16 as appearing in the updated version of CGST Act, 2017 (updated as on 30.09.2020) i.e. after the assent of the Finance Bill, 2020 and find that the same reads as under: (4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. 19. On comparing the above, with that of the provisions of sub-section(4) of Section-16 as existing prior to the introduction of the Finance Bill, 2020, we find that the amendment proposed to have been made in the said sub-section does not appear to have been made till 30.09.2020. However, as per Notification No.92/2020-Central Tax(Rate) dated 22.12.2020, the Central Government ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 16. Further, nowhere is it forthcoming from a plain reading of the said amended sub-section, that the intention of the Government, by omitting the words invoice relating to such from the words invoice relating to such debit note pertains in the said sub-section, was to disconnect the debit note from the original invoice so that the debit note gains an independent existence so as to entitle the applicant to claim Input Tax Credit in relation to CGST-SGST charged separately in debit notes issued by the supplier in current financial year i.e. 2020-21, towards the transactions for the period 2018-19. It, therefore, appears, that the applicant is interpreting the aforementioned changes in his own way to suit/support his contention. We therefore, completely disagree with the view of the applicant when they state that the earlier words invoice relating to such debit note were restricting the claims to Input Tax Credit to a particular time limit and this anomaly was detected and recognized by Government vide the Finance Act, 2020 No.12 of 2020. We are of the opinion that the aforementioned change affected as a result of Finance Act, 2020 has not brought about any drastic o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods or services, rate of tax and the amount of the tax debited to the recipient and (i) signature or digital signature of the supplier or his authorized representative. 21. On going through the particulars to be contained in the debit note as per the e-flyer issued by the Board, it can be seen that as per entry (g) above, serial number and date of the corresponding tax invoice or, as the case may be, the bill of supply is to be provided in the debit note. Therefore, the very purpose of making the aforementioned entry in the debit note is to enable the recipient of the supply to correlate the said debit note with the original invoice issued by the supplier and to take credit of the same in his input tax credit account. Thus from a combined reading of the definition of debit note , sub-section (3) of Section 34 of the CGST Act, 2017 and the particulars to be provided in a debit note issued under GST, it is amply clear that the debit note is not an independent document or an invoice in itself and is connected to an invoice as it is issued in pursuance to change in value of an invoice. It, therefore, follows that the financial year to which a debit note pertains, is inva ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
