2021 (7) TMI 1362 - AAR - GST

Claiming Input Tax Credit on Old Invoices: Ruling Clarifies Time Limits

The Authority for Advance Ruling in Andhra Pradesh determined that claiming input tax credit on a tax invoice dated 01.04.2020 for services provided in ... Input tax credit limitation under Section 16(4) - Tax invoice issuance time-limit and Rule 47 - Tax invoice pertains to the financial year of supply - Eligibility to claim ITCInput tax credit limitation under Section 16(4) - Tax invoice pertains to the financial year of supply - Whether the tax invoice dated 01.04.2020 for rental services supplied during 01.04.2018 to 31.03.2019 is hit by the limitation for claiming input tax credit under Section 16(4). - HELD THAT: - The invoice dated 01.04.2020 was issued for services that were received in the financial year 2018-2019. Section 16(4) disallows taking input tax credit after the due date of furnishing the return under section 39 for the month of September following the end of the financial year to which the invoice pertains, or after filing the relevant annual return, whichever is earlier. The Act and Rule 47 require that tax invoices for supply of services be issued within the prescribed period; here the invoice was not issued within the stipulated time and, in any event, does not pertain to the financial year 2019-2020 by virtue of its subject-matter. Consequently, the invoice is to be treated as pertaining to financial year 2018-2019 and the time-limit in Section 16(4) applies accordingly, barring entitlement to ITC now. [Paras 7]The invoice pertains to services rendered in financial year 2018-2019 and is hit by the limitation under Section 16(4), hence ITC is not allowable.Eligibility to claim ITC - Input tax credit limitation under Section 16(4) - Whether availing ITC on the said invoice after 01.04.2020 but before filing the return for September 2021 or the annual return for 2020-2021 would contravene the condition in Section 16(4). - HELD THAT: - Because the invoice relates to the 2018-2019 financial year and Section 16(4) requires ITC to be claimed by the due date of the return for September following that financial year (or on filing the relevant annual return), claiming ITC after 01.04.2020 but prior to filing returns for September 2021/annual return 2020-2021 does not cure the bar created by Section 16(4). The authority accordingly holds that availing ITC in the period specified would violate the limitation prescribed under Section 16(4). [Paras 7]Affirmative; availing ITC on the invoice after 01.04.2020 and before filing the September 2021/annual 2020-2021 return would violate Section 16(4).Final Conclusion: The Authority rules that the invoice dated 01.04.2020 pertains to services rendered in FY 2018-2019 and is barred by Section 16(4) from attracting input tax credit; accordingly, claiming ITC thereafter (including the period before filing returns for September 2021 or the annual return 2020-2021) would be contrary to Section 16(4). Issues involved:1. Interpretation of Section 16(4) of the CGST/SGST Act, 2017 regarding input tax credit on a tax invoice dated 01.04.2020 for services provided in the financial year 2018-2019.2. Determining if availing input tax credit after 01.04.2020 but before filing GST return for September 2021/Annual Return for 2020-2021 violates Section 16(4).Issue 1: Interpretation of Section 16(4) regarding input tax credit on a tax invoice for services provided in the financial year 2018-2019:The applicant sought a ruling on whether a tax invoice dated 01.04.2020 for rental services provided from 01.04.2018 to 31.03.2019 is eligible for input tax credit under Section 16(4). The applicant argued that the restriction under Section 16(4) is not applicable to the invoice dated 01.04.2020 as it pertains to services provided in the financial year 2018-2019. The Authority examined the provisions of Section 16(4) which prohibit input tax credit after the due date of filing returns for the relevant financial year. The Authority concluded that the applicant is not entitled to claim input tax credit on the invoice dated 01.04.2020 as it does not fulfill the requirement that the invoice should relate to the financial year in which the services were provided, as mandated by the Act.Issue 2: Determining if availing input tax credit after 01.04.2020 but before filing GST return for September 2021/Annual Return for 2020-2021 violates Section 16(4):The second question raised was whether availing input tax credit after 01.04.2020 but before filing GST return for September 2021/Annual Return for 2020-2021 would violate the conditions stipulated under Section 16(4). The Authority affirmed that availing input tax credit on the invoice dated 01.04.2020 after the specified date would indeed amount to a violation of the conditions laid down in Section 16(4). This decision was based on the fact that the invoice pertained to services rendered in the financial year 2018-2019 and did not meet the criteria for claiming input tax credit under the Act.This judgment by the Authority for Advance Ruling, Andhra Pradesh, clarified the application of Section 16(4) of the CGST/SGST Act, 2017 concerning input tax credit on invoices for services provided in specific financial years. The ruling emphasized the importance of adhering to the prescribed timelines and conditions for claiming input tax credit under the relevant provisions of the Act.