TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 348
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....Limited having its registered office at I-37, Lalita Kunj, Shanker Nagar Road, Ward No. 29, Anupam Nagar, Raipur, Chhattisgarh is registered under GST having GSTIN 22AAECJ8819PIZ1 has filed the instant application seeking advance ruling as to Whether the tax charged by the supplier on Hydrotreated Vegetable Oil (HVO)/ Renewable diesel / Renewable diesel will be available to the applicant as Input Tax Credit, whereby such Hydrotreated Vegetable Oil (HVO)/ Renewable diesel will be used by the applicant in providing transportation services taxable under Forward Charge Mechanism? 2. Facts of the case: - 2.1. The applicant has in their instant application informed: that they M/s Jai Ambey Roadlines Private Limited having GSTIN 22AAECJ8819P1Z1 is a proprietorship firm primarily engaged in the business of Land transport services of goods. 2.2. That, the applicant is an individual and is willing to use Hydrotreated Vegetable Oil (HVO)/Renewable diesel in the business of supplying taxable services under Forward Charge Mechanism of transportation of goods. 2.3. That, as per Notification No. 11/2017-Central Tax (Rate) dt. 28.06.2017 as amended from time to time, the applicable rat....
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....e rate of 18% the relevant HSN code for the procurement of Hydrotreated Vegetable Oil (HVO) / Renewable diesel is under Chapter-27 having HSN code 2710 and the tax rate is of 18% under entry 33(heading 2710) of schedule III in Notification No. 1/2017 central tax dt. 28/06/2017. Schedule S.No. Chapter/Heading/Sub-heading/Tariff item Description of Goods CGST Rate (%) SGST Rate (%) III 33 2710 Petroleum oils and oils obtained from bituminous minerals, other than petroleum crude; preparations not elsewhere specified or included, containing by weight 70% or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils; [other than Avgas and Kerosene PDS and other than petrol, Diesel and ATF, not in GST] 9% 9% 3.6 That, for a transporter, the purchase of fuel is an input cost incurred in the course or furtherance of their business of providing transportation services. Under Section16(1) of the Central Goods and Services Tax Act, 2017, every registered person is entitled to take credit of input tax charged on any supply of goods or services or both to him which are used o....
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....so far as they relate to motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa): While Section 17(5) restricts ITC on motor vehicles with a seating capacity of not more than thirteen persons (including the driver) except for certain specified purposes (like transportation of goods), it does not contain a blanket restriction on claiming ITC on fuel itself, provided the fuel is a taxable good under GST. Therefore, as per the understanding of the applicant, there is no provision which restricts input tax credit on inputs, input services or capital goods used for supply such services. 3.8 That, the applicant with reference to the above submission is entitled to get Input Tax Credit Since, biodiesel is a taxable good under GST, a transporter purchasing biodiesel for running the vehicles for transportation of goods would generally be eligible to claim ITC on the GST paid on such purchase. This is because the biodiesel is an input used directly in providing taxable outward supply of transportation services which is also taxable under Forward Charge Mechanism. 3.9 That, an Advance ruling In Re Yougesh Charan No. RAJ/ AAR/2023-24/07 has been filed on the simil....
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.... 27. 4.7. He stated that, to understand the availability of Input tax credit on procurement of Hydrotreated Vegetable Oil (HVO) / Renewable diesel for providing transportation services under Forward Charge Mechanism, the applicant prefers an application of Advance ruling in terms of section 97 of CGST/SGST Act. 4.8. That the, government has formulated National Policy on Biofuels - 2018 which sets the new agendas consistent with the redefined role of emerging developments in the Renewable Sector. (Copy of National Policy on Biofuels - 2018 is appended as Annexure S-1). 4.9. That the, use of biofuels in the energy and transportation sectors of the country is increasing during the coming decade. And the aim of the policy to utilize, develop and promote domestic feedstock and its utilization for production of biofuels thereby increasingly substitute fossil fuels. 4.10. That, the applicant provides the services of transportation of goods taxable under Forward Charge Mechanism for that the applicant procure Hydrotreated Vegetable Oil (HVO) / Renewable diesel for the vehicle to provide transportation services of goods by road in agreement to the National policy on Bio-fuels 20....
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.... section lists goods and services on which ITC is not available, commonly known as blocked credits. (17)(5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:- (a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely :- (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles; (aa) vessels and aircraft except when they are used- (i) for making the following taxable supplies, namely:- (A) further supply of such vessels or aircraft; or (B) transportation of passengers; or (C) imparting training on navigating such vessels; or (D) imparting training on flying such aircraft; (ii) for transportation of goods: (ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor ....
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....ions of a State Goods and Services 'Tax Act or Union. Territory Goods and Services Tax Act shall be deemed to be the Authority for advance ruling in respect of that State or Union territory. Section 97(2) of CGST Act, 2017 stipulates that: - The question, on which the advance ruling is sought under this Act, shall be in respect of- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term. Further 103 of CGST Act, 2017 stipulates about the ruling pronounced as under: - The advance ruling pronounced by the Authority or the Appellate Authority under th....
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....of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37; (b) he has received the goods or services or both. Explanation.- For the purposes of this clause, it shall be deemed that the registered person has received the goods or, as the case may be, services- (i) where the goods are delivered by the supplier to a recipient or any other person on the direction of such registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to goods or otherwise; (ii) where the services are provided by the supplier to any person on the direction of and on account of such registered person; (ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted;] (c) subject to the provisions of section 41, the tax charged in respect of such supply has been actually paid to the Government, eithe....
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....tained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or both pertaining to the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed up to the thirtieth November, 2021. (6) Where registration of a registered person is cancelled under section 29 and subsequently the cancellation of registration is revoked, by any order, either under section 30 or pursuant to any order made by the Appellate Authority or the Appellate Tribunal or court and where availment of input tax credit in respect of an invoice or debit note was not restricted, under sub-section (4) on the date of order of cancellation of registration, the said person shall be entitled to take the input tax credit in respect of such invoice or debit note for supply of goods or services or both, in a return under section 39,- (i) filed up to thirtieth day of November following the financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier; or (ii) for the period from the date of cance....
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.... Provided further that the restriction of fifty per cent. shall not apply to the tax paid on supplies made by one registered person to another registered person having the same Permanent Account Number. (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely :- (a) motor vehicles for transportation of persons having approved seating capacity of not more than Thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely :- (A) further supply of such motor vehicles; or (B) transportation of passengers; or (C) imparting training on driving such motor vehicles; (aa) vessels and aircraft except when they are used- (i) for making the following taxable supplies, namely: - (A) further supply of such vessels or aircraft; or (B) transportation of passengers; or (C) imparting training on navigating such vessels; or (D) imparting training on flying such aircraft; 1 (ii) for transportation of goods; ....
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...., additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; [Explanation 2.- For the purposes of clause (d), it is hereby clarified that notwithstanding anything to the contrary contained in any judgment, decree or order of any court, tribunal, or other authority, any reference to "plant or machinery" shall be construed and shall always be deemed to have been construed as a reference to "plant and machinery. (e) goods or services or both on which tax has been paid under section 10; (f) goods or services or both received by a non-resident taxable person except on goods imported by him; (fa) goods or services or both received by a taxable person, which are used or intended to be used for activities relating to his obligations under corporate social responsibility referred to in section 135 of the Companies Act, 2013; (g) goods or services or both used for personal consumption; (h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and (i) any tax paid in accordance with the provisions of section 74 in respect of any period up to Financial Y....
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..... A conjoint reading of section 16 and section 164 of the CGST Act, 2017 clearly indicates that the Government is also empowered to make rules to regulate availing and utilization of Input tax credit. Further, it is a well settled law that when the statute prescribes certain things to be done in a particular manner, the same shall be done in that manner alone and not in any other manner. The conditions that are, necessarily required to be satisfied by a registered taxable person for availing Input Tax credit as per section 16(2) of CGST Act, 2017 as is in vogue, includes (a) he should be in possession of tax invoice or debit note or such other documents as may be prescribed; (aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37; (b) he has received the goods or services or both. (ba) the details of input tax credit in respect of the said supply communicated to such registered person under section 38 has not been restricted; ....
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.... "Section 155. Burden of proof - Where any person claims he is eligible for input tax credit under this Act, the burden of proving such claim shall lie on such person." 5.9 Thus, the burden of proving eligibility for Input tax credit under the CGST Act, 2017 lies squarely upon the Tax payer themselves. Hon'ble Supreme Court, in it judgement, in the case of State of Karnataka v. M/s. Ecom Gill Coffee Trading Pvt. Ltd. [Civil Appeal No. 230 of 2023 dated March 13, 2023] held that the burden to prove the admissibility of credit would lie on the taxpayer claiming the ITC. The Hon'ble court held that tax invoices and payment details alone would not be sufficient proof and provided a list of documents/records that would need to be furnished in such cases to prove the admissibility of credit. It was further observed that merely producing tax invoices and payment proofs is not sufficient to discharge this burden; satisfying such burden would require the production of additional records like: (i) names and addresses of the sellers, (ii) details of the vehicles which were used to deliver the goods to the taxpayers, (iii) proof of payment of freig....
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....ch are being operated in contravention of the various control orders, for Prevention of Unauthorized Sale of Petroleum Products, various State Governments have issued instructions to their respective designated authorities to take necessary action in the matter. 5.12 It is also seen from the information as is available in public domain, that The Ministry of Petroleum and Natural Gas, Government of India has issued certain control Orders under the Essential Commodities Act, 1955. In the Solvent Raffinates and Slop (Acquisition, Sale, Storage and Prevention of Use in automobiles) Order, 2000, it is stated in sub clause (2) of clause (3) of the Order that no person shall either use or help in any manner the use of Solvents, Raffinates, Slops or their equivalent or other product except Motor Spirit and High-Speed Diesel, in any automobile. Similarly in the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005, it has been provided that as per the sub clause 5 of clause 3 of the said order, no person shall sell or agree to sell any petroleum product or its mixture other than Motor Spirit or High Speed Diesel or any other....