9911796707
TMI Blog2024 (7) TMI 1342X X X X Extracts X X X X X X X X Extracts X X X X ..... lause (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 on Rejection of ITC claims due to mismatch between GSTR-3B and GSTR-2A and Impact of supplier's incorrect output tax liability reduction on applicant's ITC claim, 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 these questions. It is seen that in the instant case it is apparent that the original supplier has issued credit notes with tax elements and reduced their output tax liability, resulted in mismatching of the input Lax credit available in GSTR 2A of the applicant and the ITC availed in GSTR-3B. The applicant has not furnished adequate reasons for the said mismatch; instead they have filed an application for advance ruling to the competent authority and also submitted their readiness to reply to the proceedings on the receipt of advance ruling. The GSTR 2A of the applicant shows tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant'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 output tax liability reduction based on a financial/ commercial credit note issued by him to applicant, will such action affect the output tax liability or input tax credit claim of the applicant? 4. The contentions of the applicant: 4.1 Applicant act as a distributor of consumer products, mainly those manufactured by Hindustan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be prescribed: Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and interest on such supply has been passed on to any other person. 4.7. The applicant also submits that, according to Section 43 (5) of the CGST Act, it is seen that the output tax liability reduction of the supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 issued to the applicant for the year 2017-18 in connection with the reversal of input tax credit against credit notes issued by the supplier dealer. 6. Personal Hearing: The applicant was granted an opportunity for a personal hearing on 01.12.2023 Adv. R.S Hariharan represented the applicant in the personal hearing. The representative reiterated the contentions made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 are satisfied. Section 98 of the Act specify the procedure to be followed on receipt of an advance ruling application. 7.4. Sub-section (1) (2) of Section 98 of the CGST/ SGST Act reads as follows (1) On receipt of an application, the Authority shall cause a copy thereof to be forwarded to the concerned officer and, if necessary, call upon him to furnish the relevant records: Provided that where any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Act it is evident 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 provisions of the CGST/SGST Act. 7.9. Therefore, it is apparent that, proceedings are pending against the applicant on the date of filing of advance ruling online application on 19.08.2021 and liable to be rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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