Coal producer denied Input Tax Credit for delayed supplier compliance. Applicant mandated to reverse excess ITC.

The ruling determined that the applicant, a coal producer and supplier, was not entitled to the Input Tax Credit (ITC) claimed on invoices for January 2020, February 2020, and March 2020 due to the supplier's delayed tax compliance. Consequently, the applicant was mandated to reverse the excess ITC availed, as per the restrictions outlined in the GST Act and Rules. The ruling's validity is contingent on the provisions of the GST Act until potentially invalidated under specified sections.

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Issues Involved:
1. Entitlement of input tax credit (ITC) claimed by the applicant on invoices raised by the supplier for the period January 2020, February 2020, and March 2020.
2. Requirement for the applicant to reverse the ITC already availed if the supplier has paid the tax belatedly.

Issue-wise Detailed Analysis:

1. Entitlement of Input Tax Credit (ITC):
- The applicant, a producer and supplier of coal, availed ITC on services received from the supplier for the tax periods January 2020, February 2020, and March 2020.
- The supplier declared these supplies in FORM GSTR-1 and furnished the return in FORM GSTR-3B in November 2020, beyond the due date.
- Section 16 of the GST Act prescribes the eligibility and conditions for taking ITC. The applicant fulfilled conditions under section 16(2)(a), 16(2)(b), and 16(2)(d) by possessing tax invoices, receiving services, and furnishing returns under section 39.
- However, the supplier paid the tax in November 2020, which raised the question of whether the applicant could claim ITC despite the supplier's delayed compliance.
- Rule 36(4) of the GST Rules, effective from 09.10.2019, restricts ITC availment if the supplier has not uploaded invoice details. The applicant availed ITC in violation of this rule as the supplier uploaded the details in November 2020.
- The auto-drafted FORM GSTR-2B, effective from 01.01.2021, indicated a "Return Filed Post Annual Cut-off" for the applicant's November 2020 period. However, this form did not have statutory force for the periods in question (January 2020 to March 2020).

2. Requirement to Reverse ITC:
- Considering the restrictions under section 16(2)(c) and rule 36(4), the applicant availed ITC in excess of the entitlement prescribed.
- The ruling concluded that the applicant is not entitled to the ITC claimed for the invoices raised during January 2020, February 2020, and March 2020, as the supplier's compliance was delayed.
- Consequently, the applicant is required to reverse the said ITC.

Ruling:
- The applicant is not entitled to the ITC claimed on the invoices for January 2020, February 2020, and March 2020, as the supplier furnished FORM GSTR-1 and FORM GSTR-3B in November 2020.
- The applicant must reverse the ITC availed for these periods.
- This ruling is valid subject to the provisions under Section 103 until declared void under Section 104(1) of the GST Act.

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