Case: M/s Diya Agencies Vs State Tax Officer (Kerala High Court) WP(C) No. 29769 of 2023 dated September 12, 2023
The Court held that, if the taxpayer is able to prove that tax amount is paid to the seller and the Input Tax Credit claim is bonafide, so the Tax Credit cannot be denied merely on non-reflection in GSTR-2A.
Summary of the submission made before the court
- The taxpayer’s claim for the input tax credit of Rs.44,51,943.08/- for CGST and SGST has been limited at excess claim of Rs.1,04,376.05/- as CGST and same amount as SGST credit has been denied on the ground that as per the GSTR 2A in respect of invoice supply, the taxpayer is only eligible for input tax amount shown in CGSTR 2A.
- The taxpayer placed reliance on the Judgment of the High Court of Judicature at Calcutta (Suncraft Energy Private Limited and Another v. The Assistant Commissioner, State Tax, Ballygunge Charge and others) delivered on 02.08.2023.
- The taxpayer submits that the he had fulfilled all the conditions as stipulated under Section 16 (2) and he has paid the tax to the seller dealer and valid tax invoice has been issued by the seller dealer.
- The taxpayer grieved that despite having fulfilled all the conditions as per the conditions enumerated under Section 16 (2) of the Act, the assessing authority has reversed the credit availed and directed the taxpayer to deposit the tax to the extent of disallowance.
- The submission of the taxpayer also stated that Central Board of Indirect Tax and Customs had issued press release dated 18.10.2018 clarifying that furnishing of outward details in Form GSTR-1 by the corresponding supplier(s) and the facility to view the same in Form GSTR-2A by the recipient is in the nature of taxpayer facilitation and does not impact the ability of the tax payer to avail ITC on self-assessment basis in consonance with the provisions of Section 16 of the Act.
Held
- If the seller dealer (supplier) has not remitted the said amount paid by the taxpayer to him, the taxpayer cannot be held responsible. Whether the taxpayer has paid the tax amount and the transactions between the taxpayer and seller dealer are genuine are the matter on facts and evidence.
- The taxpayer has to discharge the burden of proof regarding the remittance of tax to the seller dealer by giving evidence.
- The denial of the input tax credit to the taxpayer is not sustainable, and the matter is remanded back to the Assessing Officer to give opportunity to the taxpayer for his claim for input tax credit.
- Merely on the ground that in Form GSTR-2A the said tax is not reflected should not be a sufficient ground to deny the taxpayer the claim of the input tax credit.
Author Comments
This case underscores the unfairness of denying ITC solely on the basis of non-population of transaction in GSTR-2A. The court recognizes that taxpayers should not be held liable for a condition which is outside the control, such as the non-payment of taxes by the Supplier.