Belated payment of IGS on disputed imports -- Eligibility of ITC

[Muthukumar Muthunarasimhan]

Dear Experts,

Can we take ITC by way of belated payment of IGST on the disputed imports machinery which was cleared and utilized for production more than year? ( During such period case is pending and now favoured to the department.)

[KASTURI SETHI]

Not allowed. See Section 17 (5) (i) of CGST Act, 2017 and Rule 36(3) of CGST Rules, 2017. Your case is hit by Section 17 (5)(i) of CGST Act, 2017.

SECTION 17. Apportionment of credit and blocked credits

(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely :-

(i) any tax paid in accordance with the provisions of sections 74, 129 and 130.

RULE 36. Documentary requirements and conditions for claiming input tax credit.

(3) No input tax credit shall be availed by a registered person in respect of any tax that has been paid in pursuance of any order where any demand has been confirmed on account of any fraud, wilful misstatement or suppression of facts.

[Alkesh Jani]

Sir,

Whether, the dispute was regarding payment of Customs duty (Customs duty includes IGST)?

[Muthukumar Muthunarasimhan]

Dear Mr.Alkesh

Customs duty includes IGST payment at the time of import.

[Alkesh Jani]

Sir,

I understand Customs duty includes IGST, my question was belated payment was disputed by Customs Authority or GST Authority?

[Alkesh Jani]

Also mention who passed the order?

[Muthukumar Muthunarasimhan]

Dear Mr.Alkesh,

Customs DRI issued the summon and hearing was over. Customs authority insisted to pay IGST.

[Alkesh Jani]

Sir,

You can take credit on the basis of Duty paid challan (Customs duty). As Section 17(5) of CGST Act, 2017 is for Tax and not for Duty, neither it is disputed under Section mentioned.

This is my view. As full details were not give our expert expressed the views as per the information furnished.

Thanks

AI Summary

ITC not allowed on disputed imported machinery under Section 17(5)(i) CGST Act and Rule 36(3) CGST Rules. A forum user inquired about the eligibility of claiming Input Tax Credit (ITC) through belated payment of Integrated Goods and Services Tax (IGST) on disputed imported machinery used for over a year, where the case was resolved in favor of the department. An expert responded that ITC is not allowed under Section 17(5)(i) of the Central Goods and Services Tax (CGST) Act, 2017, and Rule 36(3) of the CGST Rules, 2017. Another participant questioned whether the dispute involved customs duty, which includes IGST. The discussion clarified that the Customs authority required the IGST payment, and a participant suggested ITC might be claimed based on the duty paid challan, noting the distinction between tax and duty under the CGST Act.