TaxTMI 
TaxTMI 
2026 (9) TMI 151
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....ct, 2017. There is no allegation of fraud, wilful misstatement or suppression of facts. GROUNDS OF APPEAL The appellant has raised the following grounds of appeal: 2. The appellant submitted that the Learned Adjudicating Authority erred in confirming the demand merely on account of differences in allocation of ITC between IGST, CGST and SGST, without appreciating that the aggregate ITC availed remained within the eligible credit. There being no dispute regarding eligibility under Section 16, the demand is unsustainable. 2.1 The appellant submitted that the alleged excess is only due to misclassification/reconciliation between different tax heads and not any actual excess availment of ITC. The genuineness of purchases and eligibility of ITC have not been disputed. 2.2 The appellant submitted that IGST credit is legally available for utilisation towards CGST and SGST liabilities in accordance with Section 49 and the prescribed utilisation mechanism. Hence, the alleged difference between tax heads cannot constitute excess ITC in aggregate. 2.3 The appellant submitted that inadvertent clerical or accounting misclassification of ITC between IGST, CGST and SGST, without....
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....eturns. 4.1 The appellant submitted that there was no excess availment of ITC in aggregate and that the total eligible ITC available to the appellant was not exceeded. The alleged discrepancy was merely a clerical/misclassification error between IGST, CGST and SGST heads. It was further submitted that the IGST credit reflected in the relevant return was otherwise eligible and that the appellant had sufficient aggregate ITC in its Electronic Credit Ledger. It was contended that the issue was one of reconciliation and rectification and not of fresh or wrongful availment of ITC. 4.2 The appellant further submitted that there was no fraud, wilful misstatement or suppression of facts and that the proceedings were initiated under Section 73 of the CGST Act, 2017. Accordingly, the levy of interest and penalty was also contested. RESPONDENT'S CONTENTION 5. The learned departmental representative submitted in the argument that availment of ITC under an incorrect tax head is not permissible under the statutory scheme. It was submitted that where there is a shortfall under a particular tax head, the taxpayer is required to discharge the liability under that head and any excess ....
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.... CBIC vide Circular No. 192/04/2023-GST dated 17th July 2023 had given clarification on charging of interest under section 50(3) of the CGST Act, 2017, in cases of wrong availment of IGST credit and reversal thereof. With respect to the calculation of interest under Rule 88B of the CGST Rules, it has been clarified in the above circular that "Since the amount of input tax credit available in electronic credit ledger, under any of the heads of IGST, CGST or SGST, can be utilized for payment of liability of IGST, it is the total input tax credit available in electronic credit ledger, under the heads of IGST, CGST and SGST taken together, that has to be considered for calculation of interest under rule 88B of CGST Rules and for determining as to whether the balance in the electronic credit ledger has fallen below the amount of wrongly availed input tax credit of IGST, and to what extent the balance in electronic credit ledger has fallen below the said amount of wrongly availed credit. Thus, in the cases where IGST credit has been wrongly availed and subsequently reversed on a certain date, there will not be any interest liability under sub-section (3) of section 50 of CGST Ac....
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....edger should be consider as pool of funds designate for different types of tax such IGST CGST and SGST while determining interest under Rule 88b of the CGST rules the entire wallet has to be taken into consideration, note just individual compartments if the total balance (combining IGST CGST and SGST) fall below the amount of wrongly availed IGST credit there is interest liability if, however, the total wallet balance never dips below this specific amount during the relevant period, there is no interest liability. 7. The aforesaid clarification is relevant to the present dispute, particularly where the appellant has asserted that the aggregate balance of ITC under IGST, CGST and SGST was sufficient and that there was no excess availment in substance. 7.1 The appellant has also contended that the discrepancy is revenue neutral. The department has not established any actual loss of revenue arising from the alleged misclassification. Accordingly, the demand cannot be sustained merely on the ground that the credit was reflected under an incorrect tax head. 7.2 The proceedings were initiated under Section 73 of the CGST Act, 2017 and there is no allegation of fraud, wilful m....