2024 (8) TMI 643 - AAR - GST

Rectification of certain errors that were apparent on the face of the Order - AAR Ruling - The AR contended that having admitted the application in the first place the AAR ought to have passed rulings in respect of all the three queries raised by the applicant. - HELD THAT - Since no error apparent on the face of the record is noticed in the instant case no rectification is required to be made and as the provisions of the Customs Act do not get attracted in the instant case the differential IGST paid by the applicant becomes ineligible for availment of ITC in terms of Section of the CGST Act 2017. There is no apparent error or mistake on the face of the record as alleged by the applicant - the instant application for of advance ruling is liable for rejection in terms of Section 98 (2) of the CGST/TNGST Acts 2017.

Issues Involved:
1. Eligibility to avail Input Tax Credit (ITC) of Integrated Goods and Services Tax (IGST) paid as part of differential Customs duty.
2. Validity of documents evidencing payment for availing ITC.
3. Applicability of GST provisions on availment of ITC of differential IGST paid post on-site audit by Customs authorities.

Detailed Analysis:

1. Eligibility to Avail ITC of IGST Paid as Part of Differential Customs Duty:
The applicant sought clarification on whether they are eligible to avail ITC of IGST paid as part of differential Customs duty for imports made during the relevant period as per the timeline prescribed under Section 16(4) of the CGST Act, 2017. The Authority for Advance Ruling (AAR) refrained from answering this question, stating that it is rendered redundant once the main query on the admissibility of ITC on differential IGST is answered.

2. Validity of Documents Evidencing Payment for Availing ITC:
The applicant questioned whether documents evidencing payment can be considered as valid duty-paying documents for availing ITC of IGST paid as part of differential Customs duty in terms of Section 16(2) of the CGST Act, 2017 read with Rule 36(3) of CGST Rules, 2017. The AAR did not provide a ruling on this question, considering it redundant once the main query on the admissibility of ITC on differential IGST is answered.

3. Applicability of GST Provisions on Availment of ITC of Differential IGST Paid Post On-Site Audit by Customs Authorities:
The AAR addressed the main question regarding the applicability of GST provisions on the availment of ITC of differential IGST paid post on-site audit by Customs authorities. The AAR concluded that the differential IGST paid by the applicant is not eligible for ITC as laid down under Section 17(5) of the CGST/TNGST Act, 2017. The ruling stated that since the applicant paid a 15% penalty, it indicates a determination of tax by reason of willful misstatement or suppression of facts, making the differential IGST ineligible for ITC.

Errors and Rectifications:
The applicant filed for rectification of mistakes, claiming that the AAR did not express an opinion on the first two questions and made errors in the third question's ruling. They argued that the AAR should have answered all questions posed and cited various judgments to support their claim.

Discussion and Analysis:
- The AAR clarified that rectification under Section 102 of the CGST Act, 2017 is to correct errors apparent on the face of the record, not to address grievances about the ruling's correctness, which should be appealed under Section 100 of the CGST Act, 2017.
- The AAR referenced the case of M/s Erode City Municipal Corporation, where rectification was allowed for unanswered questions, but distinguished it from the current case, noting that the questions in the current case are interdependent and related to the main query.
- The AAR reiterated that the main query on the admissibility of ITC of differential IGST paid post on-site audit by Customs authorities was answered, rendering the other two questions redundant.
- The AAR addressed the applicant's contention that the differential IGST is covered under the Customs Act, clarifying that with the advent of GST, IGST on imports is governed by the IGST Act, 2017, and amendments to the Customs Tariff Act, 1975.
- The AAR also addressed the applicant's contention regarding the 15% penalty, clarifying that the penalty under Section 74(5) of the CGST Act, 2017 is applicable to IGST and is not an error.

Conclusion:
The AAR concluded that there is no error apparent on the face of the record in the Advance Ruling No. 116/AAR/2023 dated 22.11.2023. The applicant's contentions were found to be challenges to the correctness and legality of the ruling, which should be addressed through an appeal process. The application for rectification was thus rejected as per Section 98(2) of the CGST/TNGST Acts, 2017.

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