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TMI Blog2024 (2) TMI 1354X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of Section 104 of the Act, where the Authority finds that advance ruling pronounced by it under sub-section (4) of Section 98 or under sub-section (1) of Section 101 has been obtained by the applicant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the applicant as if such ruling had never been made. 5. At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. 1. The applicant submitted a copy of Electronic Cash Ledger evidencing payment of application fees of Rs. 5,000/ each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 2.1 The applicant, a GST Registrant, is a Private Limited company under the Administrative c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, ITC of IGST paid as part of differential Customs duty should be available to the taxpayer, in the instant case. 2.3 The authorities of the Centre and State were addressed to report if there are any pending proceedings against the applicant on the issues raised by the applicant in the ARA application and for comments on the issues raised. 3. The jurisdictional Centre authority has not furnished any reply in this regard, and it is construed that there are no proceedings pending on the issue raised by the applicant. 4.1 The concerned State authority under whose administrative jurisdiction the taxpayer falls, have vide letter dated 27.02.2023 stated that on perusal of the Audit Report of the Deputy Commissioner of Customs, it is seen that on the misclassification being pointing out, the applicant had agreed to the lapse and paid the differential tax payable along with applicable interest and penalty on 28.07.2022. The concerned authority has reasoned out that the order passed by the Deputy Commissioner of Customs (Audit), New Delhi, based on the mis-classification of CTH and Basic Custom duty paid by the Applicant with interest, cannot be treated as revised Bill of Entries as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment of integrated tax on imports;.............." is a prescribed document for availing ITC. * Section 17 of the CGST Act, 2017 lists down certain exceptions wherein benefit of ITC is denied. One such restriction under sub-section (5) to Section 17 is applicable in eases where the tax has been paid in accordance with the provisions of Sections 74, 129 and 130 of the CGST Act, 2017. * Further Rule 36(3) of the CGST Rules, provides for restriction on availment of credit in respect of tax amount discharged pursuant to demand order confirmed on account of any fraud, willful misstatement or suppression of facts. * Section 20 of the IGST Act, 2017 borrows the provisions from the CGST law in so far as it relates to "(iv) input tax credit", amongst other issues, whereby it becomes clear that the said provisions apply mutatis mutandis in relation to Integrated tax, as they apply in relation to central tax, as if they are enacted under the IGST Act. * As per Rule 2(62) of the CGST Rules, 2017, the term 'input tax' shall include integrated tax paid on imports. * Rule 2(66) of the CGST Rules, 2017, defines an "Invoice", from which it could be understood that a "Bill of Ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T also. * On the basis of various judicial pronouncements, it appears that the documents evidencing payment as produced by the Company to prove payment of differential duty should be given due consideration as a valid duty paying document for availment of ITC. * Since the GST law is pari materia to the erstwhile regime to a large extent, reference can also be drawn from similar provisions in the erstwhile regime. Rule 9(1)(b) the CENVAT Credit Rules, 2004 provided list of documents basis which CENVAT credit could be availed. One of the said documents was a supplementary invoice, which basically included challan or any other similar document evidencing payment of additional amount of additional duty leviable under Section 3 of the Customs Tariff Act, 1975. * As per Section 17(5) of the CGST Act, 2017, ITC is restricted in eases where the tax has been paid in accordance with the provisions of Sections 74, 129 and 130 of the CGST Act, 2017. On a bare perusal of Sections 129 and Section 130 of the CGST Act, 2017, it can be concluded that the ease of the Company does not fall within the ambit of Sections 129 and Section 130 of the CGST Act, 2017, since Section 129 provides for det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no such disallowance. * Further, as per Rule 36(3) of the CGST Rules, 2017, no ITC is allowed to the taxpayer in case the tax has been paid in pursuance of any order where demand has been confirmed on account of fraud, willful misstatement or suppression of facts. The restriction is only if payment is made pursuant to an order conforming the demand on account of any fraud, willful misstatement or suppression of facts. * The Company submits that it has not deliberately omitted so as to escape from payment of duty. In fact, proper intimation has been made by the Company to the Customs authorities by way of letter dated 17 June 2019. Moreover, no allegation of suppression has been made by the Department so far. Therefore, the Company is not liable for any suppression of facts in order to avoid payment of duty and accordingly does not get cover under the ambit of Section 74 of the CGST Act, 2017. Given this, the above provision on ITC restriction should not be applicable on the Company. Accordingly, ITC of IGST paid as part of differential Customs duty should be available. 5.2 Accordingly, the applicant interpreted that the different IGST paid should be available as ITC to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant period. The said payment has been made by the Company during the year 2022 vide demand drafts. Also, requisite certificate regarding the said payment has been issued by the concerned bank in this regard. The Company has also separately filed a letter with the Customs authorities by specifically indicating the amount of IGST (forming part of the differential Customs duty) that has been discharged vide the said demand drafts. The applicant had stated that the payment of differential IGST can very well be linked to individual imports and BoEs, and that so far, no notice has been issued on the Company regarding this differential duty payment. 8.1 Out of the three queries raised by the applicant, initially the query referred at clause (c), i.e., "(c) Whether the provisions prescribed under the Goods and Services Tax ('GST') law imposes any restriction on availment of ITC of the differential IGST paid post on-site audit by Customs authorities?" is taken up for discussion and analysis. 8.2 For ease of reference, the relevant legal provisions are reproduced herein as below : 8.2.1 Section 16 of the CGST Act stipulates the provisions or eligibility of input tax credit. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules, 2017 ('CGST Rules, 2017) provides for other documentary requirements and conditions for claiming ITC. The said rule provides for documents that are considered to be valid for the purpose of availing ITC. The same has been reproduced hereunder:- "(1) The input tax credit shall be availed by a registered person, including the Input Service Distributor, on the basis of any of the following documents, namely, - (a) an invoice issued by the supplier of goods or services or both in accordance with the provisions of section 31; (b) an invoice issued in accordance with the provisions of clause (f) of sub-section (3) of section 31, subject to the payment of tax; (c) a debit note issued by a supplier in accordance with the provisions of section 34; (d) a bill of entry or any similar document prescribed under the Customs Act, 1962 or rules made thereunder for the assessment of integrated tax on imports......." However, sub-rule (3) to Rule 36 of the CGST/TNGST Rules, 2107, reads as,- "(3) No input tax credit shall be availed by a registered person in respect of any tax that has been paid in pursuance of any order where any demand has been confirmed on account of any fraud, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice." 8.4.3 It may be noted here that though serving of a notice on the person chargeable with tax not paid or short paid is a requirement under the said provisions, a window has been provided to the taxpayers whereby they could avoid service of notice to them, if they come forward to pay the tax along with appropriate interest and a penalty equivalent to fifteen percent of such tax, as laid down under sub-sections (5) and (6) to Section 74 of the CGST Act, 2017, which is reproduced as below,- "(5) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent, of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (b) any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include the tax referred to in sub-section (7) or the cess referred to in sub-section (9). 8.7 Accordingly, it becomes clear that while the payment of differential duty of Customs gets covered under the legal provisions relating Customs, the differential IGST payable gets covered under the Integrated Goods and Services Tax Act, 2017. Further, as per Section 20 of the IGST Act, 2017, the provisions of CGST Act, 2014 applies mutatis mutandis to IGST, in so far as it relates to various aspects including "(iv) Input Tax credit", "(ix) Payment of tax", "(xvi) demands and recovery, etc. 8.8 Under 'Chapter XV - DEMANDS AND RECOVERY', Section 73 talks about 'Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for availment of ITC as laid down under Section 17(5) of the CGST/TNGST Act, 2017. 8.13 Once the basic issue involving the availment of ITC on the differential tax paid is found to be inadmissible in the instant case, we are of the opinion that the remaining two queries, relating to the time limit prescribed and the documents evidencing payment to be considered as a valid duty paying document, are rendered redundant, as both the queries are in relation to the differential tax paid in the instant case. As a result, it is felt that the question of answering the queries referred at clauses (a) and (b), docs not arise. 9. In view of the above, we rule as under; RULING (a) We refrain from giving any ruling in this regard in view of the reasons discussed in para 8.13 above; (b) We refrain from giving any ruling in this regard in view of the reasons discussed in para 8.13 above; (c) Yes, the law imposes restriction on the availment of ITC under Section 17(5) of the CGST/TNGST Act, 2017, in respect of any tax 'not paid / short paid' in accordance with the provisions of section 74, irrespective of the fact as to whether the proceedings are initiated on the basis of audit or on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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