AAR pronounces no ITC can be raised after a time frame
The restriction under Sec 16(4) did not apply to the 2020 invoice issued for the services supplied during 2018- 2019
AAR pronounces no ITC can be raised after a time frame
The restriction under Sec 16(4) did not apply to the 2020 invoice issued for the services supplied during 2018- 2019
The Andhra Pradesh Authority for Advance Ruling (AAR) has held that no Input Tax Credit (ITC) on monthly rental invoices can be raised after the expiry of the period of limitation.
The applicant, Vishnu Chemicals Limited is engaged in manufacturing basic chromium sulphate, sodium sulphate, and chromic acid to store raw materials and finished goods. It needed additional storage space and entered into a lease agreement with Usha Tubes and Pipes Pvt. Ltd.
The applicant submitted that monthly rental bills were received from Usha Tubes regularly till March 2018. But from April 2018 to March 2019, it did not issue a single tax invoice mentioning the description as rental charges.
On the other hand, the invoice mentioned Central Goods and Services Tax (CGST) of Rs.26,64,090 and State Goods and Services Tax (SGST) of Rs.26,64,090 on a total taxable value of Rs.2,96,01,000.
The applicant contended it was entitled to avail ITC on the April 2020 invoice on or before filing the Form GSTR 3B for September 2021 or the date of filing of the Annual Return for the Financial Year 2020-2021, whichever was earlier.
But the restriction under Sec 16(4) does not apply to the April 2020 invoice issued in the instant case for renting/leasing services supplied in the year 2018- 2019.
The Coram of D. Ramesh, (Member, State Tax) and RV Pradhamesh Bhanu (Member, Central Tax), observed that for any transaction, the tax invoice is the primary document evidencing the supply and vital for availing the ITC. But the tax invoice was issued by the lessor in April 2020 for the services supplied in the Financial Year 2018-2019. This meant, as prescribed in Rule 47, the invoice was not issued within the stipulated time.
AAR further observed that the applicant was mandated to claim ITC before the due date of furnishing the Income Tax Return.