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TMI Blog2024 (7) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... n there is no agreement between applicant and original supplier saying that the credit notes should not be treated as financial/ commercial credit notes, then if the applicant has treated the credit notes issued by the original supplier as financial/commercial credit notes, whether the applicant will be liable to reverse the applicant's input tax credit to the extent of tax element in such credit note?. 3.2. In view of provision under section 43, when there is no agreement between the applicant and the supplier to have the ITC claim reduced, and when the applicant has treated the credit notes as financial/ commercial credit notes only, and paid tax after deducting ITC based on original supply invoice; whether the applicant is eligible to claim the Input Tax Credit claimable by him as per the purchase invoices in GSTR-3B? 3.3. In view of provision u/s 43 (5), where mismatch of ITC claim figures is seen between GSTR-3B and GSTR-2A figures, when such mismatch has occurred due to situations where Section 43 (5) of the CGST Act can be invoked, can the GST Department reject the applicant's ITC claim on the basis of such mismatch?. 3.4. When the original supplier incorrectly claims ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the applicant) and GSTR-2A (the Input Tax Credit eligible by the applicant). 4.6. The applicant contended that, according to the proviso to Section 34 (2) of the CGST Act, if the recipient does not acknowledge or accept the tax element in the credit notes issued by the supplier, but supply the goods outward} and paid output tax on such outward supply after utilising the ITC according to the tax invoice raised by the supplier, then the supplier is ineligible to deduct the tax element In that credit note from supplier "s output tax liability. But the supplier was not heeding applicant's request to set right their incorrect treatment of credit notes. Section 34 (2) is extracted below: S.34. Credit and debit notes. (2) Any registered person. who issues a credit note in relation to a supply of goods or services or both shall declare the details of such credit note in the return for the month during which such credit note has been issued but not later than September following the end of the financial year in which su.ch supply was made, or the date of furnishing of the relevant annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit notes by the goods recipient or when supplier claim OPT reduction in excess of ITC claim reduction made by the recipient. But in their case, the GST Department have taken action against the applicant due to the incorrect treatment of credit notes by the original supplier and initiated action to disallow input tax credit claim of the applicant merely based on the mismatch of ITC claim figured in GSTR-3B filed by the applicant and GSTR-2A which is auto-generated based on entries made by the original supplier. The applicant believes that in view of Section 43 of CGST Act, the GST Department do not have the power to disallow applicant's ITC claim based on mismatch between GSTR-3B and 2A when such mismatch has occurred due to situations where Sec. 43 can be invoked. The GST Department should disallow the output tax liability reduction of the supplier, instead of taking action to disallow recipient's ITC claim. 5. Comments of the Jurisdictional Officer: The application was forwarded to the jurisdictional officer as per provisions of Section 98 (1) of the CGST Act. The jurisdictional officer has reported that a notice for intimating discrepancy in GST ASMT-10 has been iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, within the meaning of that term. The question Nos. 1 & 2 raised by the applicant on which advance ruling is sought by the applicant falls within the purview of clause (d) of sub-section (2) of Section 97 of the CGST Act, 2017; i.e, "admissibility of input tax credit of tax paid or deemed to have been paid". The question Nos. 3 &4 are not in respect of any matter that IS specified in Sect. 97 (2) of the CGST Act. This authority being a creature of statute has to function within the limits of the jurisdiction conferred on it. Accordingly, the jurisdiction of this authority does not extend to Issue rulings on the questions at Sl. Nos. 3 & 4. 7.3. Section 97 of the CGST / SGST Act specifies the manner and subjects on which an application for advance ruling can be made. An advance ruling application filed by an applicant is valid only if certain conditions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to light when the applicant was issued with ASMT-10 by the proper officer in connection with the short-payment of tax/ non-reversal of ineligible ITC. 7.8. Further, the Jurisdictional Officer has reported that the applicant has been served with a notice GST ASMT-10 dated 09.07.2020 under Section 61 of the CGST/SGST Act 2017 to the applicant for the discrepancies noticed in the scrutiny as per the scrutiny task parameters. The advance ruling application has been filed by the applicant on 19.08.2021. While examining the application of the applicant in terms of Section 98 (2), we find that the questions raised in the application pertains to the discrepancies noticed as per the GST ASMT-10 issued to them by the jurisdictional Proper Officer, which states that the Authority shall not admit the application where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provision of the Act. This reinforces the importance of ensuring no active proceedings are underway before seeking an advance ruling on tax matters. On a combined reading of the provisions governing advance ruling under Sect, 97 & 98 of the CGST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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