2018 (6) TMI 461 - AAR - GST

Taxpayer's Claim for Clean Environment Cess Input Tax Credit Denied Due to Jurisdictional and Statutory Limitations Under Section 97(2)

In this tax case, the HC rejected the applicant's claim for Input Tax Credit (ITC) on Clean Environment Cess paid during coal import. The ruling ... Admissibility of input tax credit - definition of input tax - transitional credit - Clean Energy Cess - jurisdiction of Authority for Advance Ruling under the CGST ActAdmissibility of input tax credit - definition of input tax - transitional credit - Clean Energy Cess - jurisdiction of Authority for Advance Ruling under the CGST Act - Application seeking advance ruling on admissibility of transitional input tax credit of Clean Energy Cess paid on import is beyond the scope of Section 97(2)(d) of the CGST Act and is not maintainable before the Authority for Advance Ruling. - HELD THAT: - The Authority examined the statutory definition of input tax which, as reproduced in the order, refers to central tax, State tax, integrated tax or Union territory tax charged on supplies and expressly includes integrated tax charged on import of goods and certain taxes payable under specified provisions of the GST enactments. The Clean Energy Cess claimed by the applicant as transitional credit arises under a levy outside the taxes incorporated in the statutory definition of input tax. Consequently, Section 97(2)(d), which authorises advance rulings on the admissibility of input tax credit under the GST Acts, does not extend to claims of transitional credit in respect of the Clean Energy Cess. For these reasons the question posed by the applicant falls outside the domain of matters on which the Authority can rule, and the application cannot be admitted under Section 98(2). [Paras 5, 6]The application is beyond the jurisdiction of the Authority for Advance Ruling and is not admitted under Section 98(2) of the CGST Act, 2017.Final Conclusion: The Authority refused admission of the application: the claim for transitional credit of Clean Energy Cess paid on imported coal does not fall within the definition of input tax under the CGST Act and therefore the Advance Ruling Authority has no jurisdiction to decide the question under Section 97(2)(d). Issues:- Admissibility of Input Tax Credit on Clean Environment (Energy) Cess paid at the time of import of Coal.Analysis:The applicant, an importer and trader of coal, sought an advance ruling on the admissibility of Input Tax Credit (ITC) on Clean Environment (Energy) Cess paid at the time of coal import. The applicant had paid a significant amount as Clean Energy Cess on imported coal, which they claimed as Transitional Credit. The jurisdictional officer opined that Clean Energy Cess is not eligible for ITC under the credit rules and cannot be paid using available credit. The officer highlighted that the transitional credit on Clean Energy Cess does not arise due to ineligibility under existing laws before the introduction of the APGST Act, 2017.During a Personal Hearing, the applicant's representative argued that the issue falls under Section 97(2)(d) of the CGST Act, 2017. However, the Authority noted that the input tax credit referred to by the applicant pertains to transitional relief paid under a different Act than SGST, CGST, and IGST Acts specified in the definition of input tax under the CGST Act. Consequently, the question raised did not align with Section 97(2)(d) of the CGST Act, 2017.Based on the analysis, the Authority concluded that the application was beyond its jurisdiction as it did not fall under Section 97(2) of the CGST Act, 2017. Therefore, the application seeking clarification on the admissibility of Input Tax Credit on Clean Energy Cess paid during coal import was not admitted under Section 98(2) of the CGST Act, 2017.