Filing of return by supplier for claiming ITC during FY 2018-19

[POOJA AGARWAL]

Dear Experts

Few of my clients have received GST notices disputing ITC for FY 2018-19 on the ground that theirsuppliers have filed their returns after the Cut-Off date for FY 2018-19 ie. 20 Oct 2019 ITC; though the client has taken ITC prior to 20 Oct 2019. No section is mentioned in the SCN

As per my understanding of section 16(4) provides time limit for availment of credit by recipient and has no relevance with filing of return by supplier. In fact there was no condition for FY 2018-19 regarding the supplier's return filing. Please confirm

[Padmanathan KV]

You are right. The provision of section 16(4) is for recipient to claim ITC and not for supplier to pay taxes. You have to contest the demand as there is no legal provision for the same.

[KASTURI SETHI]

The following judgement of Supreme Court (the department's SLP was dismissed) and Calcutta High Court judgement can be useful :-

ASSISTANT COMMISSIONER OF STATE TAX, BALLYGUNJGE CHARGE Versus SUNCRAFT ENERGY PVT. LTD. - 2023 (12) TMI 739 - SC ORDER 

SUNCRAFT ENERGY PVT. LTD. Versus ASSISTANT COMMISSIONER, STATE TAX, BALLYGUNGE CHARGE - 2023 (8) TMI 174 - CALCUTTA HIGH COURT

 

[POOJA AGARWAL]

Thank you for the prompt responses.

[Shilpi Jain]

I agree that the time limit in 16(4) is for recipient to take credit and also that certain conditions in section 16(2) can be fulfilled post facto also. Supplier disclosing in R1 (before introduction of 16(2)(aa)) is one such condition.

Also have a look at the decision of the Kerala HC in the case of M Trade Links - 2024 (6) TMI 288 - KERALA HIGH COURTwhich has given retrospective effect to the amendment extending time limit to avail credit.

As per this, in case your supplier has updated his R1 by 30th Nov, it should be considered as being done within time limit. This can help in defending your case.

AI Summary

Clarification Sought on GST ITC Claims for FY 2018-19 Under Section 16(4); Legal Precedents Referenced on Supplier Deadlines. A discussion forum addressed issues regarding GST notices disputing Input Tax Credit (ITC) claims for FY 2018-19, due to suppliers filing returns post the cut-off date of October 20, 2019. Participants clarified that Section 16(4) of the GST Act pertains to the recipient's credit claim timeline, not the supplier's return filing. Legal precedents, including judgments from the Supreme Court and Calcutta High Court, were referenced to support this interpretation. Additionally, a Kerala High Court decision was mentioned, suggesting that if suppliers updated their returns by November 30, it should be deemed timely, aiding in contesting the notices.