itc claim under wrong head

[giri gattupalli]

respected sir,

one registered person during FY 2017-18 claimed 5,00,000 less input tax credit under IGST head and claimed 5,00,000 excess input tax credit under CGST & SGST heads and utilized also. . it was happed due to clerical mistake. and now notice has been issued asking to pay excess claim of input tax taken under CGST & SGST heads but silent on less claim of IGST. and department asking for interest also. how to deal with this situation. i invite our experts opinion and discussion.

thanking you

[Amit Agrawal]

You need to explain the reason of difference (i.e. disclosure of ITC of IGST under the head of CGST & SGST, due to human error) with proper evidences like your invoice-wise ITC register (monthwise total matching with GSTR-3B), ITC invoice-wise entries matching with GSTR-2A / 2B etc. and defend the ITC so claimed by demonstrating that you were fully entitled for subject ITC under dispute otherwise and mistake is 'technical' & limited to disclosure while filing GSTR-3B.

But, Dept. may not accept your position and you should be ready to defend yourself through judicial proceedings.

If need be, kindly take assistance from an expert.

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

[Kapil Gupta]

Dear sir,

Department will not give any benefit to you on this issue and you will have to approach appellate authority to take the benefit of the same.

[Padmanathan KV]

There is no express provision or any direct judgement on this issue. Thus you will have to litigate the matter in appeal. In my opinion, this matter will have to travel to Tribunal (as and when formed) if not the High Court, to get settled.

[KASTURI SETHI]

There is judgement of High Court in favour of the department on this very issue. The department will fight up to the end. In pursuance of the judgement, the department is issuing SCN.

Your client is in a catch-22 situation. No escape route. Have to face the rigours of litigation.

[Padmanathan KV]

Dear Kasturi sir,

Kindly share the citation of the decision mentioned above for the benefit of all.

[KASTURI SETHI]

Sh.Padmanathan Kollengode Ji,

I have read the judgement of Madras High Court on TIOL in May,23 on this issue. My subscription to TIOL has expired on 30.6.23 and I did not get it renewed. I do not remember the name of the party. However, High Court allowed refund of excess paid. This case is very useful for the purpose of refund claim by not treating the same as time barred. The relevant date for applying refund claim was considered in favour of the party.

However, I am trying my best to trace out the same. As soon as it is traced out, I shall post here.

[giri gattupalli]

thanks to all those who participated in the discussion. discussion is very informative. i request you to keep this query open and let me learn.

thank you

[Shilpi Jain]

Courts would give a lenient view. However, one stand which can be taken is that by availing as CGST and SGST credit instead of IGST, there has been no mis-utilisation of credit

And initial years of GST these lapses should not be taken too seriously to put the taxpayer in disadvantageous position..

But this fight could be a costly affair. Though can be contested to keep the issue alive and benefit of any Court decision in anyone else's case should be taken in future.

[KASTURI SETHI]

Sh.Padmanathan Kollengode Ji,

W.r.t. your desire at serial no. 5 dated 11.7.23 above, two case laws are posted here .

2020 (11) TMI 108 - MADRAS HIGH COURT - SUN DYE CHEM Versus ASSISTANT COMMISSIONER (ST), TIRUPUR

Relied in 2021 (3) TMI 524 - MADRAS HIGH COURT

Followed in 2023 (1) TMI 881 - ORISSA HIGH COURT

Second case law :

2023 (3) TMI-628-Madras High Court -  Deepa Traders.

[husain ezzy]

what happen to your notice .. ?? same happen with my party i need suggestion . pls provide any detail is department asking for interest and tax to pay ??

[THYAGARAJAN KALYANASUNDARAM]

Dear friends,

One of my client faced identical issue while filing the GSTR-3B and was claimed IGST instead of CGST and SGST in 2018-19 and vice versa in 2019-2020. So, I filed writ petition in WP No. 29369/2023 - 2023 (10) TMI 794 - MADRAS HIGH COURT before the hon'ble madras high court for seeking rectification of GSTR-3B. Accordingly, direct the petitioner to file sec 161 of GST Act and may be considered by the department According to law. Later, I filed sec 161 rectification application along with the copy of the court order. But, the department asked further time to get it clarified from their superior. Still we are fighting with the department. Please let me know your opinion on this.

[KASTURI SETHI]

Sh. Thyagarajan Kalyanasundaram Ji,

W.r.t. the above, most of the decisions including AARs, High Courts, Supreme Court regarding rectification of GSTR-3B are in favour of Govt.

It is natural that the department will use time being gained for tracing out case laws in favour of Govt.

So it will be a long journey.

[THYAGARAJAN KALYANASUNDARAM]

Dear Sir,

I filed writ petition for seeking rectification of GSTR-3B before Hon'ble Madras High Court, in WP No.29369 of 2023 - 2023 (10) TMI 794 - MADRAS HIGH COURT. however, court dismiss the petition with direction to the Department to consider the sec 161 Application filed by the Petitioner and dispose it according to law. The department consider my rectification application and drop the original demand order.

Thanks for your support.

[ganesh murthi]

hallo, year 2020-21, by clerical mistake, in GSTR-3B, the ITC claimed in the RCM.

GSTR-2B and purchase invoice shown CGST & SGST paid by suppliers.

GST department issued Notice to reverse ITC, what do sir ? please help !

[Ankur Parika]

Dear experts,

in aformentioned case, can't we use recent judgement issued by Kerala High court ? facts of the case are almost similar. Need your suggestion or view on this ?

Divya S.R. v. Union of India - 2024 (1) TMI 869 - KERALA HIGH COURT

AI Summary

Taxpayer Mistakenly Claims Excess ITC Under Wrong Heads, Faces Repayment Demand: Legal Opinions Suggest Defense as Technical Error A registered taxpayer mistakenly claimed excess input tax credit (ITC) under the CGST and SGST heads instead of the IGST head during the fiscal year 2017-18, resulting in a notice demanding repayment and interest. The taxpayer sought advice on addressing this issue. Responses suggested providing evidence of the error and defending the claim as a technical mistake. Legal opinions varied, with some advising litigation, including potential appeals to higher courts. Previous court rulings were referenced, indicating mixed outcomes. The discussion highlighted the complexity of rectifying such errors and the potential for prolonged legal proceedings.