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2025 (6) TMI 1069
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....xpayer under the Central Goods & Services Tax Act, 2017 and Kerala State Goods & Services Tax Act, 2017. The grievance of the petitioner is against the demand under Section 73 of the CGST Act pertaining to the assessment year 2017-2018 issued by the 1st respondent. 2. Allegation based on which the proceedings referred to above were initiated was that, according to the 1st respondent, there were certain irregularities on the part of the petitioner in availing input tax credit. According to the respondent, the petitioner availed excess input tax credit of Rs.1,29,906/. According to the petitioner, the same was the result of a mismatch while availing ITC under the wrong heads. Even though as against Ext.P1, an appeal was submitted under Sec....
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....ticee in their written reply submitted that Section 77 of the CGST Act, 2017 deals with cases where tax has been paid under an incorrect head. This section outlines the provisions for refunding taxes paid under an incorrect head in situations where the nature of the transaction is subsequently determined to be different from what was initially considered. Since the legislation itself is allowing a refund of tax paid, they requested that ITC availed under the head CGST/SGST be adjusted with IGST. 25. Further the noticee argued that when the department is allowed to adjust the refund being claimed against any outstanding tax liability in accordance with rule 92(1A), this entire exercise proposed to levy tax in the SCN is revenue neut....
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....dispute regarding the eligibility of the input tax credit claimed by the noticee; but the allegation pertains to the noticee erroneously availing the input tax credit under incorrect heads, specifically CGST & SGST credit availed instead of IGST credit. 27. In accordance with Section 49(2) of the Goods and Services Tax (GST) Act, the input tax credit, as assessed by the registered person in their return, is credited to their electronic credit ledger. The utilization of the electronic credit ledger for discharging payments related to output tax is governed by the provisions outlined in Sections 49(4) and 49(5) of the GST Act. Section 49(4) and 49(5) is reproduced below; Section 49(4): The amount available in the electronic ....
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....on between different tax components. As delineated in the prescribed order of utilization, IGST credits are permissible for the settlement of liabilities arising from CGST and SGST, and conversely. The only restrictions are that central tax cannot be used for the payment of state tax or union territory tax, and vice versa. In the instant case, the noticee availed credit under CGST and SGST instead of IGST and utilised the same for payment of GST arising out of outward supplies. Therefore, based on the interpretation of Section 49(5) and the specific order of priority for utilizing input tax credits, the noticee's actions are consistent with the legal framework. 29. CBIC vide Circular No.192/04/2023-GST dated 17th July 2023 had ....
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....nt of such wrongly availed IGST credit. However, when the balance of ITC, under the heads of IGST, CGST and SGST of electronic credit ledger taken together, falls below such wrongly availed amount of IGST credit, then it will amount to the utilization of such wrongly availed IGST credit and the extent of utilization will be the extent to which the total balance in electronic credit ledger under heads of IGST, CGST and SGST taken together falls below such amount of wrongly availed IGST credit, and will attract interest as per sub-section (3) of section 50 of CGST Act, read with section 20 of Integrated Goods and Services Tax Act, 2017 and sub-rule (3) of rule 88B of CGST Page 3 of 3 Rules." 30. The essence of the above clarification....
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....hat the noticee is not liable to reverse the CGST (27,000/-) and SGST (27,000/-) availed instead of IGST through the GSTR 3B and the demand of Rs.54,000/- in the Show Cause Notice No. is liable to be dropped." 8. We have deemed it appropriate to extract the above findings from the order of the Assistant Commissioner since we find that it not only represents the correct view of the procedural law in this regard, but more importantly, demonstrates that revenue officials, even at the level of Assistant Commissioner, who are often the first point of contact between an assessee and the revenue department, are capable of rendering timely and effective justice in our country which is known for its huge backlog of cases. At a time when the....