2024 (5) TMI 235 - AAR - GST

Vehicle Purchase Input Tax Credit Denied Due to Prior Tax Rate Election and GSTR-01 Filing in July 2023

In Re: M/s. Noori Travels.

Transport service provider sought advance ruling on input tax credit for vehicle purchase. SC determined that due to prior lower tax rate election and ... Availing and utilization of Input Tax Credit - supply of car was made in the month of July 2023 when the applicant was still availing the lower rate of tax on his supplies by forfeiting is right to claim input tax credit on purchase of goods and services - HELD THAT:- The applicant is paying tax at the rate of 6% CGST + 6% SGST after availing input tax credit under the same sub entry as provided by notification 31 of 2017 dated 13-10-2017 and 20 of 2017 dated 22/8/2017. The applicant purchased a motor vehicle and the details of purchase were reported in GSTR-2B in the month of July 2023. The applicant avers that the original invoice was issued on 4/8/20123 that is in the month of August and therefore they would like to claim input tax credit on this invoice which was raised on them in the month of August 2023 that is during the month in which they have opted to pay higher rate of tax with ITC. The applicant by opting to pay tax at a lower rate by not availing input tax credit on the goods and services used in his supplies has forfeited his right to avail input tax credit on the goods and services procured by him during the earlier period. The car purchased by him was reported by the supplier in his GSTR-01 in the month of July under section 37 of the CGST Act and the applicant was communicated this invoice in his GSTR-2B return - Therefore it is concluded that the supply of car was made in the month of July 2023 when the applicant was still availing the lower rate of tax on his supplies by forfeiting is right to claim input tax credit on purchase of goods and services and hence the ITC pertaining to the purchase of car is not available to the applicant. Issues:The judgment involves the application for Advance Ruling under Section 97(1) of TGST Act, 2017 concerning the eligibility of input tax credit on a vehicle purchase and its utilization.Brief Facts of the Case:The applicant, a transport service provider, initially paid GST at 5% on output services with limited ITC. Subsequently, the output tax rate was increased to 12% with full ITC. The applicant purchased a Mercedes Benz car and sought to avail input tax credit of Rs. 13,94,702 over 5 years. The purchase invoice was dated 4.8.2023, although it was uploaded in the supplier's GSTR-2B return for July 2023.Questions Raised:The applicant sought clarification on whether the GST amount of Rs. 13,94,702 paid on the vehicle purchase could be considered as input tax credit and utilized.Discussion & Findings:1. The applicant paid tax at different rates based on ITC availability, forfeiting the right to claim ITC on earlier purchases by opting for a lower tax rate previously.2. The purchase invoice for the car was reported in the supplier's GSTR-01 in July 2023, indicating the supply was made in that month when the applicant was still availing the lower tax rate without ITC.3. Statutory returns filed on the common portal were considered as superior evidence compared to physical invoices, leading to the conclusion that ITC related to the car purchase was not available to the applicant.Ruling:The Authority ruled that the GST amount of Rs. 13,94,702 paid on the vehicle purchase was not eligible for input tax credit and utilization.