availment of ITC of IGST paid under protest by the supplier., Goods and Services Tax - GST

[Narendra Soni]

Dear experts,

Please suggest can we avail ITC of IGST paid under protest by the supplier ????. Under protest is also mentioned on invoices of supplier.

Please confirm at the earliest.

Posts / Replies

[Ganeshan Kalyani]

In my view input tax credit of the tax paid under protest is not eligible.

[Alkesh Jani]

Sir, any disputed ITC can be availed but you should not utilize it, unless final order is issued.

Our experts may correct me if mistaken,

Thanks

[YAGAY and SUN]

In our view it is allowed however if ITC is being availed then on the event of favourable adjudication the supplier would not be able to seek refund from the GST Department.

[Narendra Soni]

Sir,

Matter is that from July 17 to 13.10.17, IGST was applicable on import.Bill of entry made at SEZ portal was calculated IGST on assessable value whereas ICE gate calculate after adding BCD and it's cess.

Now assessing officer at SEZ asked for differential IGST and Interest, we paid under protest,can be avail ITC of IGST paid under protest in this case.

[YAGAY and SUN]

Yes, you can still avail the ITC but on interest amount you would not get any Credit.

[Narendra Soni]

Sir IGST is paid under protest, Still we can avail ITC???, Kindly re confirm.

[Ganeshan Kalyani]

In my view no.

[Narendra Soni]

Dear experts,

Thanks for valuable advises.

Now two types of opinions are received, one is saying that ITC is eligible, another is ITC not eligible.on GST paid under protest.

We are unable to juge which option we should select.

Hence, Kindly provide expert opinion based on rule,act or citation.

Thanks

[Alkesh Jani]

Sir,

In this regards, my point of view is that, if we apply the ratio of Para 2.1 of Circular No.33/2018 dated 23.02.2018, You may avail the credit but as it is disputed credit, you shall not utilize the same for payment of tax.

Our experts may correct me if mistaken

Thanks

[KASTURI SETHI]

Dear Querist,

Yes, I agree with Sh.Alkesh Jani, Ji. The same view has been expressed by M/s.YAGAY AND SUN, Sirs. In this context, Board's circular pertaining to pre-GST era, is appended below . This circular is helpful to arrive at some decision.

Modvat on disputed items - Classification

Circular No. 4/91-CX.8, dated 14-2-1991

[From F. No. 263/5/91-CX.8]

 

Government of India

Central Board of Excise & Customs

New Delhi

 

Subject :  Modvat Meeting held at Hyderabad on 12-7-1990 - Point No. 12 Regarding Modvat credit on disputable items.

I am directed to refer to the minutes on Point No. 12 of the Modvat meeting held at Hyderabad on 12-7-1990 regarding Modvat credit on disputable items.

It had been represented by CEI that there is generally a dispute between the industry and the Central Excise field formations regarding eligibility of certain raw materials as ‘input’ for claiming Modvat. The industry in order to preserve its right or justify the contention regarding eligibility of Modvat, avails the Modvat credit on such items in RG 23A Part II and keeps it in abeyance without utilisation. Show cause notices are, therefore, issued by Central Excise authorities every 6 months for the same inputs resulting in repeated litigation and consequential hardship to the assessees. CEI had, therefore, desired that some practical way out should therefore, be devised to save this avoidable inconvenience.

The matter has been examined. Board has decided that in case of disputed inputs show cause notices need not be issued if the assessee gives an undertaking that the credit would be taken on such disputed inputs only in RG 23A Part I and will not be utilised till the dispute is finally settled. The assessee can pay duty from PLA under protest to the extent of credit involved under disputed inputs. When the dispute is finally settled the credit can be suitably adjusted. Board has also desired that the disputes should be resolved as soon as possible and preferably within a period of 6 months.

Trade & field formations may be informed suitably.

Receipt of this letter may please be acknowledged.

 

[YAGAY and SUN]

If you are still in doubt then please do not avail the ITC of IGST, wait for favourable adjudication and then seek refund along with interest which was paid by you under protest.

[Ganeshan Kalyani]

This is suitable solution.