ITC Credit claime on Import of Machine

[InderMohan Singh]

My client is manufacturer of chemicals and purchased machine from other country registered under GST Act. My client has Bill of entry declaring value of machine and IGST thereon. My query is that can we avail IGST credit in above case as in GSTR-2A value of IGST not shown

[KASTURI SETHI]

What is the period involved ?

[Ganeshan Kalyani]

In one of my case, the proper officer had allowed the credit basis Bill of Entry copy. The IGST was not appearing in GSTR-2A.

[KALLESHAMURTHY MURTHY K.N.]

Sirs,

I agree with the views of Sri Ganeshan Kalyan ji. 

[KASTURI SETHI]

Dear Sir,

The period involved is crucial.

 

[KALLESHAMURTHY MURTHY K.N.]

Respected Sir, 

The period also counts. 

But assuming the query, the claim is within the time, IGST can be availed, though not reflected in GSTR-2A based on the payment made as per Bill of Entry. In some cases, it was allowed.

[KASTURI SETHI]

Sh.Kalleshamurthy Murthy Ji,

Sir, I fully agree with you.

What I intend to say if the period involved is 17-18, then the demand for reversal of IGST on the ground of non-reflection in Form GSTR-2A will be clearly out of the scope of mismatch of figures between GSTR-3B and Form GSTR-2A since 2 A was made operational in September, 2018.There is no doubt about case-laws, circulars and public notices which can tilt the issue in favour of tax payer.

It is worthwhile to mention here that just two days ago I have received one such case on the same issue for the period 17-18. The SCN was issued in a hurry and demand of reversal of ITC (IGST) has been confirmed along with interest and penalty in a hurry.

When 2A was not in force in 2017-18, how mismatch ?

[KALLESHAMURTHY MURTHY K.N.]

Respected Sir,

The authority concluded the order was erred. The Bill of Entry is proof of payment of IGST. The availment of the same cannot be rejected on the grounds that it was not reflected in GSTR-2A. The said payment would not reflected in GSTR-2A. So, the mismatching question does not come in the way. I have seen a case allowed in such circumstances relating to the period 2017-18 during 2022 itself.

Thanking you Sir.

[KASTURI SETHI]

You are absolutely right, Sir.

[KALLESHAMURTHY MURTHY K.N.]

Thank you very much, Sir.

[Padmanathan KV]

There was some circular also stating ITC can be availed on the basis of Bill of Entry since some of the Ports are still not linked to online portal and hence, that could be a reason for non-reflection in GSTR-2A. 

[KASTURI SETHI]

Refer to Board's Circular Nos.183/15/2022-GST dated 27.12.22 and 193/05/2023-GST dated 17.7.23.

The Circulars allow to take ITC on the physical copy of assessed Bill of entry. The conditions mentioned therein have to be followed.

[KASTURI SETHI]

In this context, also go through Public Notice No.80/17 issued by Commissioner Customs Nhava  Sheva. Para No.8 is extracted below :

"8. IGST Availment in case of Manual Bill of Entry : Since all the validation related to IGST refund or flow of IGST credit would happen electronically between Customs EDI and GSTN, it is imperative here that the required data is captured electronically without fail for all the imports and exports whether or not they are made through EDI locations. In case of EDI locations, Board has issued instructions vide F.No. 401/81/2011-Cus III dated 2nd June 2017 wherein it is envisaged that any manual bill of entry or shipping bill in EDI locations need to be filed following the procedure laid out in the above instructions"

[Shilpi Jain]

The requirement for appearance in GSTR-2A or 2B is only w.r.t. invoices and not BoE. Hence, even if BoE is not appearing in these statements, credit can be availed if all the other conditions for being eligible for credit under law are satisfied.

[Vishal Garge]

If we avail the ITC on the basis of Bill of entry date (which fall in earlier tax period) instead of ICEGATE reference date which could be later date of any one of Duty Payment or out of charge or amendment (which fall next tax period of BE date), what could be the consequences on availed ITC.   

Further what date will be considered for effect of ITC availed in the credit ledger for a case mentioned following,

1. BOE date : 25th SEP 2024

2. ITC availed in SEP 2024 but reflected in GSTR-2B of Oct 2024

3. ICEGATE reference date : 01st OCT 2024 which is duty payment date 

4. ITC claimed date for accumulated credit reference number in credit ledger is 20th Oct 2024 for period SEP 2024.

AI Summary

IGST credit entitlement can be claimed on import based on assessed bill of entry despite non reflection in GST returns. IGST paid on import may be claimed as input tax credit on the basis of an assessed Bill of Entry even if the IGST does not appear in GST return purchase statements, provided the claimant satisfies statutory eligibility conditions and time limits. For periods predating full electronic validation, non reflection in return statements is not determinative. Circulars and public notices permit ITC on physical assessed BoE where electronic capture is absent, but differing BoE, ICEGATE reference, duty payment and ledger entry dates can affect the tax period for recognition and compliance consequences.