Own weighbridge & Transport Vehicle

[SK Krishna]

Dear sir/madam,

The dealer is supplier of iron & steel. They have their own weighbridge & transport vehicles. During blocking of credit under rule 86A, the authorities are not considering their inward movement of goods from supplier stockyard due their own weighbridge receipt & transportation documents. Pls suggest how to contend with this issue.

Thanks in advance.

[Amit Agrawal]

Merely for reason of using own weighbridge & transport vehicles - while transporting goods - cannot be 'sole' reason for blocking of credit under rule 86A.

It appears that ITC is blocked on the ground that ITC is availed without receipt of goods.

And as per Section 155, where any person claims that he is eligible for input tax credit under this Act, the burden of proving such claim shall lie on such person.

So, person availing ITC needs to prove that subject goods are actually received by him with corroborative evidences (which can be from the end of supplier of goods and at the end of recipient).

One needs to go through contents of order issued u/r 86A (1) and also, see available evidences (i.e. any addition to having own weighbridge & transport vehicles), before commenting on actual defence strategy.

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

[Padmanathan KV]

The department cannot simply disregard own weighbridge receipt and transport document without establishing that they are actually fake. It is a common business practice to have own weighbridge and vehicle and that by itself does not indicate that transportation has not take place.

The weighbridge usually have stamping, passing and calibration certificate from State legal metrology department/ authorized agencies. Also the weighbridge receipts have timestamping as well.

Moreover, toll charges receipts/ FASTag entry, vehicle logbook, driver's statement, loading/unloading charges paid, gatepass, etc... can be also used to corroborate. In one case, we have used CCTV footage, which was ultimately accepted by the officer.

[Shilpi Jain]

A good case to file Writ in the High Court.

[Shilpi Jain]

This is assuming that the transactions in question are genuine and there are other evidences to prove the same.

AI Summary

Input tax credit eligibility requires corroborative receipt evidence; own weighbridge and transport documents alone do not suffice under scrutiny. Blocking input tax credit solely because the recipient uses its own weighbridge and vehicles is not justified; the claimant bears the burden under Section 155 to prove receipt of goods with corroborative evidence. Acceptable proofs include stamped/timestamped weighbridge receipts with calibration records, transport documents, toll/FASTag entries, vehicle logbooks, driver statements, gatepasses, loading/unloading receipts, and CCTV footage. The specific blocking order must be examined to tailor defence, and a writ petition may be an option where genuine transactions are evidenced but credits are nonetheless blocked.