TaxTMI 
TaxTMI 
2025 (9) TMI 1044
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....including IGST [Integrated Goods and Services Tax] leviable under section 3(7) of the Customs Tariff Act, 1975 read with section 5 of the IGST Act, 2017. The IGST so paid at the time of import, is availed as ITC [Input Tax Credit]. 4. The applicant has further stated as follows: • that they are now contemplating payment to the foreign supplier beyond 180 days from the date of import/shipment, as permitted under the Foreign Exchange Management Act (FEMA), 1999 and regulations framed thereunder by the Reserve Bank of India (RBI). • that since such deferred payments are valid and compliant under FEMA, they will not be hit by the second proviso to section 16(2) of the CGST Act, 2017, read with rule 37 of the CGST Rules, 2017, in view of the following, viz • that the foreign supplier does not levy or collect GST from the applicant; • IGST on imports is not part of the payment made to the foreign supplier; that only the value of goods is payable to the foreign supplier; • that IGST is paid directly by the importer to the government through the ICEGATE portal; • that since no GST is charged or payable to the ....
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....ia extended by the overseas supplier, while buyers' credit refers to loans for payment of imports into India arranged by the importer from a bank or financial institution outside India for maturity of less than three years. It may be noted that buyers' credit and suppliers' credit for three years and above come under the category of External Commercial Borrowings (ECB) which are governed by ECB guidelines. a) Amount and Maturity AD banks are permitted to approve trade credits for imports into India up to USD 20 million per import transaction for imports permissible under the current Foreign Trade Policy of the OGFT with a maturity period up to one year (from the date of shipment). For import of capital goods as classified by OGFT. AD banks may approve trade credits up to USD 20 million per import transaction with a maturity period of more than one year and less than three years (from the date of shipment). No roll-over/extension wil be permitted beyond the permissible period. AD banks shall not approve trade credit exceeding USD 20 million per import transaction b) AI-in-cost Ceilings The current all-in-cost ceilings are as under : Ma....
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....wherein they have submitted their comments on the application filed by the applicant. The Department has contended as under: - • The related firm of the applicant namely, M/s Priya Blue Recycling LLP and M/s Best Oasis Limited are engaged in ship-breaking activities which is similar to the business, which the applicant wishes to pursue. • The application for advance ruling cannot be admitted as is liable to be rejected under Section 98(2) of the CGST Act, 2017 for the following reason: • A SCN dtd. DGGI/AZU/GR-B/36-108/2024-25 dtd. 03.08.2024 was issued by the DGGI Zonal Unit, Ahmedabad to M/s Nagar Sheth Ship Breakers (GSTN:24AAAFN3879J1Z1) based on the outcome of the investigations and search conducted on 19.11.2019 in relation to Priya Blue Group by the Income Tax Department. • The said SCN has been issued for the same question of law on which the applicant has sought advance ruling, wherein the noticee has imported ship from Best Oasis Limited, UAE and the noticee has not paid the consideration to the foreign supplier i.e. Best Oasis Limited within 180 days from the import of the ship. • The applicant, M/s Priya H....
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....ween the applicant and the said entity for the purpose of Section 98(2). • The said entity had purchased a vessel from Best Oasis Limited, which at that time was a subsidiary of Priya Blue Industries Pvt Ltd. • Best Oasis Limited is no longer a subsidiary of Priya Blue Industries Pvt. Ltd and in any case, the proceeding are not against Best Oasis Ltd. 10. In view of the above, a further hearing was held on 19.08.2025 in the matter, wherein the Shri Samir K Agicha, CA appeared on behalf of the applicant. To a pointed query as to whether any SCN has been issued to any of their group companies on the issue, Shri Agicha submitted that an SCN on a similar issue has been issued to a group company but in that case the supply was from a domestic supplier. He also submitted that this group company has filed a Special Civil Application in the matter before the Gujarat High Court. Subsequently, vide email dtd. 20.08.2025, the applicant has forwarded a copy of the SCN dtd. 01.08.2024 to M/s Priya Blue Industries Pvt Ltd (GSTN-24AABCP2808B1Z2) along with the copies of reply to the SCN and the SCA filed by M/s Priya Blue Industries Pvt Ltd in the High Court. Discu....
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.....2024 issued to M/s Priya Blue Industries Pvt Ltd (GSTN-24AABCP2808B1Z2) by DGGI Zonal Unit, Ahmedabad and we find that the issue involved in that case is the denial of ITC due to non-payment of consideration to a domestic supplier, whereas in the issue in hand, it is admissibility of ITC due to non-payment of consideration to an overseas supplier. We also find that as per Section 95(c) ibid, an 'applicant' means any person registered or desirous of obtaining registration under the Act. We find that this definition does not encompass a related person of the applicant. Thus, on this count also, any case pending against a related firm of the applicant, on RA the same issue on which the question has been asked by an applicant, will not be a bar as envisaged in the proviso to Section 98(2) ibid. Further, the GSTN of the applicant-M/s Priya Holding Pvt. Ltd [24AAACP0974F1Z0], M/s Priya Blue Industries Pvt Ltd [24AABCP2808B1Z2] and M/s Nagar Sheth Ship Breakers [24AAAFN3879J1Z1] as well as their PAN are also different. Thus, all the three are distinct persons as far as the GST Acts are concerned. Therefore, we reject the prayer of the Department and admit the application of the applicant....
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....d proviso to sub-section (2) of section 16. (2) Where the said registered person subsequently makes the payment of the amount towards the value of such supply along with tax payable thereon to the supplier thereof, he shall be entitled to re-avail the input tax credit referred to in sub-rule (1). (3) **** (4) The time limit specified in sub-section (4) of section 16 shall not apply to a claim for re-availing of any credit, in accordance with the provisions of the Act or the provisions of this Chapter, that had been reversed earlier. 16. Section 16 of the CGST Act, 2017, deals with eligibility and conditions for taking ITC. Section 17, ibid, likewise deals with apportionment of credit and blocked credits. The issue to be decided herein is whether the second proviso to section 16 read with rule 37 of the CGST Rules, 2017 would apply in a case wherein the applicant, who has consequent to import of the goods and payment of import duty along with IGST, has deferred payment to the foreign supplier beyond 180 days. 17. The applicant feels, that the second proviso to section 16 read with rule 37 of the CGST Rules, 2017, would not apply in respect of import ....
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....eserve Bank of India, has vide their Master Circular No. 9/2011-12 dated 1.7.2011on External Commercial Borrowings & Trade credit, permitted AD Banks to approve trade credit for imports with maturity up to 1 year from the date of shipment. 19. The applicant has also relied upon the Minutes of the 6th GST Council Meeting held on 11.12.2016, the relevant extracts of which is as under, viz viii. Section 16(2) (Eligibility and conditions for taking input tax credit): In respect of paragraph 11(xxi), the Hon'ble Minister from West Bengal stated that his understanding was that the provision of reversal of input tax credit on account of non-payment of the contracted amount of consideration within a period of three months from the date of issue of invoice shall apply to both goods and services in order to avoid distinction between goods and services. The Secretary to the Council stated that in this provision, a distinction could be made between goods and services because it was easier to check supply of goods than supply of services. The Commissioner, Commercial Taxes (hereinafter referred to as 'CCT') Karnataka explained that in services, there was a presumption of a possibili....
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....er agreed that the time period for making payments shall be increased from three months to six months from the date of issuance of invoice. 21. GST Council has been formed under Article 279A(4) of the Constitution of India. The Hon'ble Supreme Court, in the case of Mohit Minerals P Ltd [2022 (61) G.S.T.L. 257 (S.C.)], held that the recommendations of GST Council have persuasive value. The above minutes of the GST Council meeting held in 2016, reveal the intent behind the second proviso to Section 16(2) of CGST Act, 2017. Having adopted the recommendation, the intent of the Legislature, in not allowing the ITC, is writ large. Further, having already deposited the IGST while clearing the goods from Customs, now, not allowing the ITC on the grounds of non-payment of the value of the goods to the supplier, by no stretch of imagination can be termed as an anti-evasion measure, the Government revenue already having been protected. Moreover, while interpreting the statute, the intention of the Legislature cannot be ignored. This view is substantiated by the judgement of the Hon'ble Supreme Court in the case of Radha Krishan Industries [2021 (48) G.S.T.L. 113 (S.C.)], wherein the Court ....