TaxTMI 
TaxTMI 
2020 (12) TMI 273
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....e applicant is subject to rejection solely on the ground that the tax collected by the supplier of the raw material from the applicant is paid to the government through utilization of ineligible input tax credit. At the outset, we would like to make it clear that the provisions of both the CGST Act and the HPGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the HPGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling. the expression `GST Act' would mean CGST Act and HPGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions of the applicant are as under: - 2.1 That the applicant is a partnership firm running under the name and style of M/s Aditya Industries situated at Industrial Area, Trilokpur road, Kala Amb, Tehsil Nahan, Distt. Sirmour, Himachal Pardesh originally registered under the provisions of Himachal Pradesh Value Added Tax Act, 2005 ('HP VAT Act') and under Central Sales Tax Act, 1956 vide TIN No. 02040400174 and migrated into GST vide GS-FIN 02AAKFA137....
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.... (a) He is in possession of a tax invoice or debit note issued by a supplier registered under this Act, or such other tax paying documents as may be prescribed; (b) He has received the goods or services or both (c) Subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, either in cash or through utilization of input tax credit admissible in respect of the said supply; and (d) He has furnished the return under section 39: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his outward tax liability, along with interest thereon, in such manner as may be prescribed" 2.8 That to sum up the conditions as given in Section 16(2) read with Section 17(5) to decide the eligibility of Input tax credit and position ....
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....ting of the outward supplies made by the supplier to the applicant but the cannot go beyond the systems to ensure actual payment made by the supplier of the tax collected from the applicant or decide the eligibility of the input tax credit availed by the supplier. 2.12 That the law empowers the department and tax authorities to ensure the matching of the returns filed by any assesse and legitimate tax payments, which at any strength of attempt not available with the applicant. 2.13 That on the basis of the facts provided, the applicant seeks this advance ruling from the Ld. authorities of Advance Ruling on the following broad Questions. (also mentioned separately in point 14 of the AAR application) Q1: Whether the input tax credit availed by the applicant is subject to rejection solely on the ground that the tax collected by the supplier of the raw material from the applicant is not paid to the government in cash Q2: Whether the input tax credit availed by the applicant is subject to rejection solely on the ground that the tax collected by the supplier of the raw material from the applicant is paid to the government through utilization of ineligible input ta....
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....chit Singla, CA on behalf of M/s Aditya Industries, Kala Amb, District Sirmour (H.P.) appeared on-line on web-meeting/ video conference for Personal Hearing held on 03.07.2020. He re-iterated his submissions already made in the AAR application and the amended application submitted on 10.06.2020. He also submitted another reply dated 02.07.2020 where under he requested the authority to consider his submissions that the investigation launched by the department were general in nature and were in relation to verification of ITC availed and the department's letter dated 11.11.2019 was not specific and did not co-relate to the question sought in the application and the applicant interpreted that there was no ongoing enquiry/ investigation on the date of filing this application of advance ruling before the authority. Hon'ble member Sh. Rakesh Sharma, Additional Commissioner, SGST Shimla (H.P.) pointed out that the issue involves two scenarios firstly when tax collected by the supplier of the raw material from the applicant is not paid to the government in cash and secondly tax collected by the supplier of the raw material from the applicant is paid to the government through utilization of....
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....mechanism to ensure whether the tax collected by his supplier has been duly paid to the Government or not; 4.2.4.3 That the applicant on ensuring that the tax collected by his supplier is appearing in the GSTR 2A of the applicant avails the Input Tax credit and believes that the Tax collected is deemed to be paid; 4.2.4.4 That as per the relevant provisions of the CGST Rules (Rule 69), the procedure to match the details between the supplier and the receiver follows the mechanism as below: Step 1: The Supplier shall report his details of outward supplies in GSTR 1 (i.e. Statement of outward supplies under Section 37)- the details of which shall auto populate on the portal of respective receiver in GSTR 2A, Step 2: The Receiver shall accept, reject or validate the details appearing in GSTR 2A which is based on details reported by the Supplier in his GSTR 1, and file the details of inward supplier in GSTR 2 (i.e. Statement of inward supplies under Section 38) Step 3: Once the details of outward and inward supplies are reconciled between the supplier and the receiver, both shall furnish a return under section 39 (1) in Form GSTR 3. 4.2.4.5 That furth....
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.... the applicant and this is the very purpose of introduction of deeming fiction in the ibid provisions; OBSERVATIONS AND FINDINGS 5.1 We have gone through the facts of the case and the written submissions made by both, the applicant and the departmental authority. In the subject issue before us, we are asked to pass a ruling which would entail discussion of the "admissibility of input tax credit of tax paid or deemed to have been paid" under the CGST Act. 5.2 Before we decide the question raised in this application it is essential that it be first determined whether the said questions regarding activities undertaken by the applicant pertains to matters or questions specified in Section 97(2). 5.3 From a perusal of questions as discussed above in their submissions, we observe that to answer their question we will be required to discuss the admissibility of input tax credit to the applicant where the tax collected by the supplier from the applicant is not paid in cash or has been paid through in-eligible input tax credit but the same is reflecting in GSTR 2A of the applicant. 5.4 As per Section 97(2) of CGST Act, the questions on which advance ruling is sought under thi....