Bill to ship to

[Rohit K]

A is a trader who supplies furniture, B is a factory, C is a dealer in furniture.

A asks B to supply 100 furniture to C. A sends his transportation vehicle for the said supply and B loads the furniture to deliver it to C. E-way bill raised by B for 100 Nos of Furniture.

But while transporting these 100 Nos., A decides to deliver only 50 Nos. to C and A supplies remaining 50 Nos. to his other dealers. A is paying GST on the 100 Nos but raising bills separately to C (50 Nos) and other dealers (50 nos)

In this case, is A eligible for ITC of 100 Nos. of furniture? or any other GST implications in this scenario. Please clarify

With due respect,

We do face a peculiar scenario and seek your kind guidance-

1. Export Bill [ 90% under LC and 10% after 9 months from BL] was lodged with Bank "X" in July 20. Bill was discounted under " Purchase" and X took 100% Invoice value based on Bill of Exchange in their system.

2. Foreign party remitted 10% to Bank " Y" but exporter did not update X.

3. Y transferred AD code [ shipping bill] to its system and issued Bank Realisation Certificate and closed Shipping Bill in EDPMS with 10% value. Y also send Bill transfer memo to Bank X. So both banks created Export Bills wrt single export and now we get stuck with nkn closure of export bills and hence outstanding reminder from RBI Edpms.

4. Now in Dec' 22, while checking with X, they mention inability as Shipping Bill is cancelled out in their system and requested us to approach Y

, Customs and DGFT to make it alive. Further they claim interest on 10% open position in their books.

How to proceed with ?

Thanks and Regards,

[KASTURI SETHI]

SH. JAYANTA BANDYOPADHYAY Ji,

It is my humble suggestion that you should post independent query with new Issue ID. It will be convenient for experts and also in your interest.

[Shilpi Jain]

For the Bill to Ship to query---->Full Credit is eligible to A. Why is the doubt?

[Rohit K]

But the trader is not following the due process .. He is delivering only 50 goods instead of 100 and selling remaining 50 to others ...

[Amit Agrawal]

Dear Shri Naresh G Ji,

Unless and until transactions are not genuine, ITC can be claimed by A.

However, considering tax-invoice and e-way bill generated by B shows 100 Qty of goods delivered to C, instead of 50 Qty to C and 50 Qty. to others, A must be in position to demonstrate actual movement of delivery of goods as per tax-invoice/s raised by him with the help of documentary evidences like statements / affidavit / certificates &/or so-on from B, transporter & end-customers of A to prove factual position.

This will be needed by A to defend itself under clause (i) of Section 16 (2) (b) if Dept. tries to use main Section 16 (2) (b) read with Section 155 of the CGST Act, 2017 to deny ITC either partly or fully.

These are ex facie views of mine and the same should not be construed as professional advice / suggestion.

AI Summary

Input Tax Credit entitlement depends on proving genuine movement and delivery; otherwise credit may be denied by tax authorities.
Full input tax credit is available only where the transactions are genuine and the claimant can demonstrate actual movement and delivery matching invoices; contemporaneous documentary evidence such as transporter records, delivery receipts and confirmations from suppliers and end purchasers is required to defend the claim and avoid denial of credit for non genuine or inconsistent supplies.