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TMI Blog2021 (1) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... r provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE - 3.1 The applicant is engaged in procurement of scrap for the purpose of manufacturing of M.S. billets by melting the same. The current advance ruling is sought in respect of availability of ITC on the scrap and the relevant documentation required determining the eligibility of the same. 4. QUESTION RAISED BEFORE THE AUTHORITY - 4.1 Whether the procedure adopted and the documents/records maintained by the applicant (as elaborated below) can be deemed to be a sufficient compliance of the conditions and restrictions for the admissibility of input tax credit of the tax paid on inward supply of local scrap and sponge iron used by the applicant for manufacture of M.S. billets? 5. DEPARTMENT VIEW POINT - Circle in-charge of circle 3, commercial tax department (SGST), Indore informs to this authority through his letter number 17 dated 06.01.2021 and letter number 29 dated 08.01.2021 that there is an another unit of the same company, other than the unit M/s Jaideep Ispaat and Alloy private limited GSTIN23AABCJ4896R4ZQ who has file application for advance ruling exist. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therance of his business and the said amount shall be credited to the electronic credit ledger of such person 2. The above provision says that the admissibility of input tax credit is subject to such conditions and restrictions as may be prescribed. Further, the sub-section (2) of the same section states that the notwithstanding anything contained in the said section, input tax credit shall not be admissible unless four conditions are met, i.e. - a. The recipient possesses the tax invoice or debit note issued by the supplier registered under the Act, or such other documents as may be prescribed. b. The recipient has received the goods or services or both. c. Subject to the provisions of section 41 or section 43A, the tax charged in respect of such supply has been paid to the Government, either in cash or through input tax credit admissible in respect of the said supply; and d. The recipient has furnished a return in section 39. 3. That the conditions and restrictions have been prescribed in rule 36 to rule 45 of the CGST Rules, 2017. The documentary requirements and conditions for claiming ITC is given in rule 36 of the Rules. 4. Further, the relevant definitions as g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admissible (and not specifically excluded) b. Whether the prescribed conditions for claim of ITC are being met 2. Appellant submit that, as far as the generally admissibility of the concerned inputs is concerned, there is no question about the admissibility of the same. This is because the concerned inputs 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 ITC are met, the ITC is generally admissible in respect of the concerned inputs. Hence, the eligibility of ITC is dependent on whether or not the procedural conditions are being complied with or not. 3. In this respect, applicant submit that the procedural conditions for the admissibility of ITC can be simply listed as follows: a. The applicant should be in possession of tax paying documents b. The applicant should have received the goods. c. The tax charged in respect of such supply should be paid. d. The applicant should have filed a return under Section 39. 4. Therefore, the applicant submit that, if it can b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt of goods, applicant further submit that they are keeping various records to ensure that the receipt of such goods is properly accounted for, and that the input tax credit is availed on the basis of actual receipt of the concerned inputs. 2. The applicant are keeping the following records for this purpose: a. Firstly, as soon as the truck enters the premises of the applicant, 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 (LR) 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 applicant 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e there under in such manner and subject to such conditions and within such time as may be prescribed (4) The amount available in the electronic credit ledger may be 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 3. Thus, it can be seen from the above, 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. 4. For this purpose, it is further noted that on the electronic common GST portal. payment of tax is usually done on a self-assessment basis by way of filing return inform 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. 5. Furthermore, in accordance with Rule 36(4), a condition is prescribed for availing the ITC, i.e. the total input tax c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact been paid by the vendor. That, merely the fact that GSTR-3B return has been filed shows that tax has been self-assessed by the vendor and accordingly he has paid the tax due from his end. This would of course also include the tax charged in respect of the supplies made to the applicant. If the supplies made by the vendor to the applicant 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. Hence the condition for admissibility of ITC as mentioned in Section 16 of the GST Acts is clearly being fulfilled. 6.11. Without prejudice to whatever submitted hereinabove, the applicant further wish to submit 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... publish such information. That hinges on the Commissioner placing those details in public domain. If the Commissioner has not placed such information in the public domain, then it is next to impossible 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 he 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TRIES LTD. Versus COMMISSIONER OF C.EX., THANE-12007 (212) E.L.T. 63 (Tri. Mumbai) wherein it is held that Cenvat/Modvat - Default in payment of duty 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 tide 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] 6.14. Other conditions for claim of input tax credit - 1. In addition to above, applicant further submits that another condition for availing the input tax credit is that return under Section 39 is filed by the recipient. Applicant submits that, the return under Section 39 is GSTR-3B return, and that the ITC is claimed by them in the said return itself. Therefore, this condition is definitely being fulfilled for admissibility of input tax credit. 2. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant. 7. DISCUSSIONS AND FINDINGS - 7.1. We have carefully considered the submissions made by the applicant in the application, the pleadings on behalf of the Applicant made during the course of personal hearing and the submission made by Circle in-charge of circle 3, commercial tax department (SGST), Indore. 7.2. A careful reading of provisions of section 97 is required here. 7.3. The question on which advance ruling can be sought is given in subsection (2) of section 97, which reads as under: "(2) The question on which the advance ruling is sought under this Act, shall be in respect of,- (a) Classification of any goods or services or both; (b) Applicability of a notification issued under the provisions of this Act; (c) Determination of time and value of supply of goods or services or both; (d) Admissibility of input tax credit of tax paid or deemed to have been paid; (e) Determination of the liability to pay tax on any goods or services or both; (f) Whether applicant is required to be registered; (g) Whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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