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2024 (12) TMI 397 - AAR - GSTInput Tax Credit - credit on the IGST paid for the purchase of the imported machinery - HELD THAT - The machinery (a Davi Full Hydraulic Plate Roll) was imported by M/s Promau SRL, C/o IMTEX a foreign supplier and displayed at the International Machine Tool and Manufacturing Technology (IMTEX) exhibition held on January 19th to 23rd in Bangalore. The Bill of Entry No. 9280751, dated December 18, 2023, was in the name of M/s Promau SRL, C/o. IMTEX, not in the name of the applicant. The goods were cleared from customs by claiming exemption under Customs Notification 08/2016 from payment of applicable duties (Customs, SWS, IGST) by M/s Promau SRL, C/o. IMTEX. It is pertinent to mention here that the Customs Exemption Notification 08/2016, dated December 5, 2016, issued by the Government of India provides specific customs duty exemptions on goods imported for exhibitions or fairs in India. The goods imported in the present case were exempted from payment of duties relying on the above notification. The notification offers conditional exemptions from customs duties for certain goods imported temporarily for events such as exhibitions, fairs, conventions, and similar gatherings, including trade shows and demonstrations. This exemption helps companies avoid high customs duties on goods that are not intended for permanent sale or use in India but are displayed temporarily. The permissibility of claim for Input Tax Credit (ITC) by R.V. Hydraulic Services on the Integrated Goods and Services Tax (IGST) paid for imported machinery can be determined based on the statutory documentary requirements - The essential documentary requirements and the conditions to claim ITC are enumerated under section 16 of CGST act read with Rule 36 which apply mutadis mutandis under IGST. In the present scenario the claim for ITC by the applicant must have such essential documentation in their name to establish entitlement. Here, the Bill of Entry was in the name of M/s Promau SRL, C/o IMTEX and out of charge has been issued for the aforesaid goods. Section 16 (2)a read with Rule 36 (1) d of the provisions of APGST Act, 2017 and Sec 20 of IGST act. Rule 36 (1) (d) stipulates that a bill of entry or any similar document prescribed under the Customs Act, 1962 or rules made there under for the assessment of integrated tax on imports. The manual TR-6 challan used for IGST payment does not fulfill the documentation requirements outlined in rule 36 of the CGST Act for claiming ITC claim. Therefore, the Appellant is not eligible to claim ITC.
Issues Involved:
1. Whether the applicant can claim Input Tax Credit (ITC) on the Integrated Goods and Services Tax (IGST) paid for the purchase of imported machinery when the Bill of Entry is not in the applicant's name. Detailed Analysis: Issue 1: Eligibility to Claim Input Tax Credit (ITC) on IGST Paid for Imported Machinery The applicant, M/s. RV Hydraulic Services, sought an advance ruling on whether they could claim ITC on the IGST paid for machinery imported from M/s Promau SRL, Italy, when the Bill of Entry was not in their name. The machinery was initially imported for exhibition purposes under Customs Notification 08/2016, which exempts importers from paying applicable duties if the goods are imported temporarily for exhibitions and are to be re-exported. The applicant argued that they had paid the applicable duties, including IGST, and therefore should be entitled to claim ITC under Section 16 of the CGST Act, 2017. However, the legal provisions under Section 16(2) of the CGST Act and Rule 36(1)(d) require that the claimant possess relevant documents, such as the Bill of Entry, in their name to establish ownership and entitlement to claim ITC. The machinery was imported under a Bill of Entry in the name of M/s Promau SRL, C/o IMTEX, and not in the applicant's name. The customs duties were paid by the applicant on behalf of M/s Promau SRL after the exhibition. The key legal provisions considered include: - Section 5 of the IGST Act, 2017: This section outlines the levy and collection of IGST on inter-State supplies, including imports, which are treated as inter-State supplies. - Section 7 of the IGST Act, 2017: This section specifies that the import of goods is considered an inter-State supply. - Section 16 of the CGST Act, 2017: It details the eligibility and conditions for claiming ITC, requiring possession of a tax invoice or similar document, receipt of goods, payment of tax to the government, and filing of returns. - Rule 36 of the CGST Rules, 2017: It specifies the documentary requirements for claiming ITC, including the necessity for a Bill of Entry in the claimant's name. The ruling emphasized that the applicant lacked the essential documentation, specifically the Bill of Entry in their name, which is necessary to claim ITC. The TR-6 challan used for IGST payment did not satisfy the documentation requirements outlined in Rule 36 of the CGST Act. Consequently, the applicant was not eligible to claim ITC on the IGST paid for the imported machinery. Ruling: The Authority for Advance Ruling concluded that the applicant cannot claim ITC on the IGST paid for the purchase of goods when the Bill of Entry is not in the applicant's name. The ruling was negative, denying the applicant's claim for ITC under the given circumstances.
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