TaxTMI 
TaxTMI 
2021 (1) TMI 1193
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....e Ruling, a reference to such a similar provision under the CGST or MP GST Act would be mentioned as being under the GST Act. 3. BRIEF FACTS OF THE CASE - 3.1 The applicant is engaged in procurement of scrap for the purpose of manufacturing of M.S. billets by melting the same. The current advance ruling is sought in respect of availability of ITC on the scrap and the relevant documentation required determining the eligibility of the same. 4. QUESTION RAISED BEFORE THE AUTHORITY - 4.1 Whether the procedure adopted and the documents/records maintained by the applicant (as elaborated below) can be deemed to be a sufficient compliance of the conditions and restrictions for the admissibility of input tax credit of the tax paid on inward supply of local scrap and sponge iron used by the applicant for manufacture of M.S. billets? 5. DEPARTMENT VIEW POINT - Circle in-charge of circle 3, commercial tax department (SGST), Indore informs to this authority through his letter number 17 dated 06.01.2021 and letter number 29 dated 08.01.2021 that there is an another unit of the same company, other than the unit M/s Jaideep Ispaat and Alloy private limited GSTIN23AABCJ4896R4ZQ who h....
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.... or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person 2. The above provision says that the admissibility of input tax credit is subject to such conditions and restrictions as may be prescribed. Further, the sub-section (2) of the same section states that the notwithstanding anything contained in the said section, input tax credit shall not be admissible unless four conditions are met, i.e. - a. The recipient possesses the tax invoice or debit note issued by the supplier registered under the Act, or such other documents as may be prescribed. b. The recipient has received the goods or services or both. c. Subject to the provisions of section 41 or section 43A, the tax charged in respect of such supply has been paid to the Government, either in cash or through input tax credit admissible in respect of the said supply; and d. The recipient has furnished a return in section 39. 3. That the conditions and restrictions have been prescribed in rule 36 to rule 45 of the CGST Rules, 2017. The documentary requir....
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....missibility - 1. The admissibility of input tax credit (ITC) of the input tax paid on the concerned inputs is principally based on two important aspects as noted below - a. Whether ITC on concerned inputs is admissible (and not specifically excluded) b. Whether the prescribed conditions for claim of ITC are being met 2. Appellant submit that, as far as the generally admissibility of the concerned inputs is concerned, there is no question about the admissibility of the same. This is because the concerned inputs are directly used for the purpose of business. Further, the concerned inputs are not specifically included in the list of blocked credit as specified in Section 17 of the GST Acts. Therefore, subject to the fact that the procedural conditions for the claim of ITC are met, the ITC is generally admissible in respect of the concerned inputs. Hence, the eligibility of ITC is dependent on whether or not the procedural conditions are being complied with or not. 3. In this respect, applicant submit that the procedural conditions for the admissibility of ITC can be simply listed as follows: a. The applicant should be in possession of tax paying doc....
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....ty of ITC, i.e. the possession of a valid taxpaying document, is being fulfilled by the applicant along with proper accounts and records as required by various provisions in the GST Acts. 6.9. Records showing actual receipt of goods- 1. Further to the above, in respect of the second requirement, i.e. actual receipt of goods, applicant further submit that they are keeping various records to ensure that the receipt of such goods is properly accounted for, and that the input tax credit is availed on the basis of actual receipt of the concerned inputs. 2. The applicant are keeping the following records for this purpose: a. Firstly, as soon as the truck enters the premises of the applicant, a gate entry inward slip is generated by the system which shows the gate pass number, the date, vehicle number, invoice number, invoice date, lorry receipt (LR) number and date, as well as the details of the vendor, the description and the quantity of the concerned inputs in the consignment. The same is signed by the security guard and is generated in presence of the truck driver. b. Further, a photograph of the truck along with the driver thereof, clearly showing the vehic....
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....in electronic cash ledger or electronic credit ledger of the taxpayer. The relevant portion (sub-sections (3) and (4) of the said section) is reproduced below for ease of understanding - (3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made there under in such manner and subject to such conditions and within such time as may be prescribed (4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed 3. Thus, it can be seen from the above, that the payment of tax can be made by the vendor either by utilising the amount in electronic cash ledger or the amount available in the electronic credit ledger of the vendor. 4. For this purpose, it is further noted that on the electronic common GST portal. payment of tax is usually done on a self-assessment basis by way of filing return inform GSTR-3B. This is....
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....the supply is paid to the government (which is done by way of filing GSTR-3B return as mentioned in Section 59 of the GST Acts), as well as that Rule 36(4) is also complied with (which is done by way of filing GSTR-1 return). A copy of the report generated from the portal is enclosed herewith for your perusal. 8. Further to the above, appellant wishes to place on record that it is not possible to take any further precautions to make sure that the tax has in fact been paid by the vendor. That, merely the fact that GSTR-3B return has been filed shows that tax has been self-assessed by the vendor and accordingly he has paid the tax due from his end. This would of course also include the tax charged in respect of the supplies made to the applicant. If the supplies made by the vendor to the applicant have been disclosed in the vendor's GSTR-1 and the vendor has also filed their GSTR-3B, it stands to reason that the vendor would have self-assessed their taxes and would have paid the same to the Government. Hence the condition for admissibility of ITC as mentioned in Section 16 of the GST Acts is clearly being fulfilled. 6.11. Without prejudice to whatever submitted herein....
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....h of Annexures 2A and 2B but, assuming it is on account of the seller's default, there is little he can do about it. Another difficulty that the purchasing dealer would face is that he would have no access to the return filed by the selling dealer particularly since under Section 98 (1) of the DVAT Act those particulars are meant to be confidential. Under Section 98 (3) (j) of the DVAT Act, it is possible for the Commissioner, where he considers ii desirable in the public interest, to publish such information. That hinges on the Commissioner placing those details in public domain. If the Commissioner has not placed such information in the public domain, then it is next to impossible for the purchasing dealer to ascertain the failure of the selling dealer to make a correct disclosure of the sales made in his return. Again, it is not as if the Department is helpless if the selling dealer commits a default in either depositing or lawfully adjusting the VAT collected from the purchasing dealer. There are provisions in the DVAT Act, referred to hereinbefore, which empower the Department to proceed to recover the tax in arrears from the selling dealer. There is also....
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....d that Cenvat/Modvat -Documents for availing credit - Address and identity of manufacturer found to be fake and fictitious - Appellants taken sufficient precautions as they received goods from a registered dealer who happened to be a manufacturer - Certificate from Bank of Baroda also produced which furnished details about collection of an amount paid by supplier - Credit taken by appellants is in order in terms of Rule 7(2) of Cenvat Credit Rules, 2002 - Rule 9 of Cenvat Credit Rules. 2004. [paras 2,3] iii. BHUWALKA STEEL INDUSTRIES LTD. Versus COMMISSIONER OF C.EX., THANE-12007 (212) E.L.T. 63 (Tri. Mumbai) wherein it is held that Cenvat/Modvat - Default in payment of duty by input manufacturer - Credit availed by appellant sought to be reversed as duty - Precedents and C.B.E. & C. Circular holding credit not deniable on default in duty payment by input manufacturer - Reasonable precautions taken by appellant before availing credit, invoices containing all particulars as prescribed in rules - Credit taken on bona tide belief of duty payment - Documents evidencing payment of excise duty amount to supplier by appellant - Precedents and C.B.E. & C. Circular applicable - Cen....
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....fillment of conditions and restrictions prescribed in section 16 of the act read with rule 36 of the rules, the Hon'ble advance ruling authority may please admit the application and pronounce its advance ruling on the question of admissibility of ITC on the basis of procedures and conditions fulfilled by the applicant. 6.15. Conclusion- In view of above as submitted hereinabove, the applicant is fulfilling all the prescribed procedures and conditions given in the GST Act and rules for admissibility of the ITC. Hence it is requested to pronounce the ruling in favour of the applicant. 7. DISCUSSIONS AND FINDINGS - 7.1. We have carefully considered the submissions made by the applicant in the application, the pleadings on behalf of the Applicant made during the course of personal hearing and the submission made by Circle in-charge of circle 3, commercial tax department (SGST), Indore. 7.2. A careful reading of provisions of section 97 is required here. 7.3. The question on which advance ruling can be sought is given in subsection (2) of section 97, which reads as under: "(2) The question on which the advance ruling is sought under this Act, shall be in resp....