The Joint Commissioner (Appeals), being the First Appellate Authority of Goods and Services Tax (GST) recently disposed of multiple appeals pertaining to eligibility to avail Income Tax Credit (ITC) as per the provisions of Section 16(4) of the Central Goods and Services Act, 2017 (CGST Act) and retrospective extension of deadline by means of the newly inserted Section 16(5) of the CGST Act.
121 Kerala-based business entities filed appeals under Section 107(1) of the CGST Act impugning Orders-in-Original passed by adjudicatory authorities of the GST Department. Majority of the Appellants were awarded opportunities of personal hearing under Section 107(8) of the CGST Act while some of them sought adjudication of their appeals without personal hearing.
The CBIC observed that 2 of the Appeals had been barred by limitation as per Section 107(4) of the CGST Act, 2017 and dismissed their appeals in light of the Kerala High Court decision in M/s. Isha Holidays Private Limited Vs. The Commissioner, SGST Department & Ors. (2023)
Joint Commissioner (Appeals), Ajitesh Radhakrishnan observed that a few of the Appellants had failed to make pre-deposit payment as mandated by Section 107 of the CGST Act. Sub-section (6)(b) of the Section 16 stipulates that no appeal shall be filed unless the Appellant admits an amount equalling 10 percent of the remaining amount of tax in dispute. Citing inability to admit the appeals without pre-deposits, CBIC dismissed these cases while terming them to be defective in nature.
Referring to the insertion of Section 16(5) through the Finance (No. 2) Act, 2024, the CBIC held that a registered person may claim ITC for invoices or debit notes related to the supply of goods or services for the Financial Years 2017-18, 2018-19, 2019-20, and 2020-21 through any return filed under Section 39, provided that the GSTR-3B returns are filed by November 30, 2021.
Observing that a number of the appellants had duly fulfilled all the requirements as set by Section 16(5), the Appellate Authority proceeded to set aside the corresponding Orders-in-Original in accordance with Para 3.3 of CBIC Circular No. 237/31/2024-GST dated 15.10.2024.
Not all the Appellants were left relieved by the Order of the Joint Commissioner as it was clarified that voluntary payments made by Appellants vide DRC-03 may not be refunded to the Appellants while the Joint Commissioner (Appeals) proceeded to confirm penalty demands against certain Appellants observing their ineligibility to avail ITC for the period between 2018-19 to 2020-21 in violation of Section 16(2) of the CGST Act, 2017 and KSGST Act, 2017 under Section 73(9) of the CGST Act, 2017 and KSGST Act, 2017.
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