Advance Ruling Denied on Input Tax Credit for Goods Pre & Post GST

The Authority for Advance Ruling, Kerala, declined to issue an advance ruling on the applicant's queries related to claiming Input Tax Credit (ITC) on goods in stock as of 01.07.2017 and passing on ITC benefits to clients for goods procured post-01.07.2017. The Authority concluded that these issues did not fall within the categories specified for seeking advance rulings under the CGST/SGST Act, 2017, and thus, they could not provide a ruling on the matter.

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Issues:
Claim of Input Tax Credit (ITC) on goods lying in stock as on 01.07.2017 and passing on the benefit of ITC to clients.

Analysis:
The applicant, a company involved in a project for setting up a cattle feed plant, sought an advance ruling on the ITC benefit regarding goods lying in stock as of 01.07.2017 and the passing on of commensurate credit to clients for ITC availed on goods received after 01.07.2017. The applicant argued that since no credit was availed on goods in stock as of 01.07.2017, there was no obligation to pass on any ITC benefit to clients on that account. They contended that passing on the commensurate credit for ITC availed post-01.07.2017 would fulfill GST law provisions. The applicant faced challenges in claiming ITC due to issues with GSTN during the transition to the GST regime. They highlighted delays in settling bills due to uncertainty over the requirement to pass on ITC benefits to their government undertaking client to avoid potential audit objections.

The Authority for Advance Ruling examined the matter in detail, referencing Section 97(2) of the CGST/SGST Act, which outlines the questions for which advance rulings can be sought. These include classification of goods or services, applicability of notifications, determination of supply time and value, admissibility of input tax credit, tax liability determination, registration requirements, and whether certain actions amount to supply of goods or services. The issues raised by the applicant regarding passing on ITC benefits on goods in stock as of 01.07.2017 and goods procured post-01.07.2017 fall outside the scope of the matters listed in Section 97(2). Therefore, the Authority concluded that no advance ruling could be issued on these questions as they were not within the purview of the CGST/SGST Act, 2017.

In summary, the Authority for Advance Ruling, Kerala, declined to issue an advance ruling on the applicant's queries related to claiming ITC on goods in stock as of 01.07.2017 and passing on ITC benefits to clients for goods procured post-01.07.2017. The Authority clarified that these issues did not fall within the categories specified for seeking advance rulings under the CGST/SGST Act, 2017, and thus, they could not provide a ruling on the matter.

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