Retrospective Amendment of Sec.16(5), CGST Act: Kerala GST AA deletes Penalties on Short-Paid Tax [Read Order]
The ruling references the scope of retrospective applicability of an addendum to a pre-existing statute.
![Retrospective Amendment of Sec.16(5), CGST Act: Kerala GST AA deletes Penalties on Short-Paid Tax [Read Order]](https://www.taxscan.in/wp-content/uploads/2024/12/Amendment-of-Sec.165-Retrospective-Amendment-CGST-Ac-deletes-Penalties-Short-Paid-Tax-Kerala-GST-taxscan.jpg "Retrospective Amendment of Sec.16(5), CGST Act: Kerala GST AA deletes Penalties on Short-Paid Tax [Read Order]")
The Joint Commissioner (Appeals), being the First Appellate Authority of Goods and Services Tax (GST) matters recently deleted demands and penalties observing the retrospective applicability of Section 16(5) of the Central Goods and Services Tax (CGST) Act, 2017 which extends the deadline for claiming ITC for invoices or debit notes on erroneously paid tax. Supreme Court Judgements...
The Joint Commissioner (Appeals), being the First Appellate Authority of Goods and Services Tax (GST) matters recently deleted demands and penalties observing the retrospective applicability of Section 16(5) of the Central Goods and Services Tax (CGST) Act, 2017 which extends the deadline for claiming ITC for invoices or debit notes on erroneously paid tax.
Supreme Court Judgements on GST
The decision was given by the Appellate Authority while disposing of multiple appeals pertaining to eligibility to avail Income Tax Credit (ITC) according to 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 pre-existing Section 16(4) of the CGST Act forbids a registered person from availing ITC after 30th November following the end of the relevant financial year or upon furnishing of the relevant annual returns, whichever may be earlier.
Supreme Court Judgements on GST
Section 118 of Finance (No. 2) Act, 2024 inserted Section 16(5) into the CGST Act which permits a registered person to avail ITC under Section 30 until the 30th day of November, 2021 for the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21.
The Joint Commissioner (Appeals), Ajitesh Radhakrishnan observed that the ‘Memorandum Explaining the Provisions in the Finance Bill, 2024’ affirms that the amendment to the CGST Act is made effective from the 1st day of July, 2017.
Disregarding appeals that were disqualified from such benefit, the Joint Commissioner (Appeals) observed that the rest of appeals had been filed before the deadline of November 30, 2021 and proceeded to allow them in accordance with Para 3.3 of CBIC Circular No. 237/31/2024-GST dated 15.10.2024, consequent to the retrospective amendment to Section 16(5) of the CGST Act.
Supreme Court Judgements on GST
In light of such permission, the demands and allied penalties imposed in each of the relevant Orders-in-Original stood deleted. However the Joint Commissioner (Appeals) maintained that the same shall not effectuate any order of refund against amounts already paid and appropriated.
To Read the full text of the Order CLICK HERE
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