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

Transport service provider sought advance ruling on input tax credit for vehicle purchase. SC determined that due to prior lower tax rate election and ... Eligibility of input tax credit - Forfeiture of input tax credit by opting for lower rate without availing ITC - GSTR-1/GSTR-2B records as conclusive evidence of time of supply - Availability of ITC linked to tax period of supplyEligibility of input tax credit - Forfeiture of input tax credit by opting for lower rate without availing ITC - GSTR-1/GSTR-2B records as conclusive evidence of time of supply - Claim for input tax credit on GST charged on purchase of motor vehicle invoiced on 04.08.2023 - HELD THAT: - The Authority examined whether the applicant could claim ITC on the GST charged on the car purchased. The record showed the supplier had reported the invoice in GSTR-1 and it appeared in the applicant's GSTR-2B for July 2023, indicating the supply was effected in July 2023. The applicant had, until 31.07.2023, been paying tax at the concessional composite rate without availing ITC and thus had foregone the right to claim input tax credit for procurements made during that period. The Authority held that statutory returns filed on the common portal (GSTR-1/GSTR-2B) are entitled to greater evidentiary weight than the physical invoice produced later, and that the reporting in July 2023 meant the supply fell within the period when the applicant had not availed ITC. Consequently, the ITC on the vehicle purchase could not be availed by the applicant, notwithstanding the invoice dated 04.08.2023 and the applicant's subsequent change of tax rate w.e.f. 01.08.2023. [Paras 7, 8]The ITC on the car purchase is not available to the applicant.Final Conclusion: The Authority ruled that the GST paid on the vehicle purchase cannot be availed as input tax credit because the purchase was reflected in GSTR-2B for July 2023, a period when the applicant had chosen the lower rate and thereby forfeited entitlement to ITC; the claim is therefore disallowed. 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.