AAR Upholds Denial of ITC on TR-6 Challans for Import IGST in Becton Dickinson Case [Read Order]
TR-6 Challans, even with supporting documents, are not eligible for claiming ITC on import IGST, and that the time limits for availing ITC under Section 16(4) are applicable to reassessed bills of entry.
TR6 - Challans - Taxscan
TR6 - Challans - Taxscan
The Tamil Nadu State Appellate Authority for Advance Ruling (AAAR) has upheld the denial of Input Tax Credit (ITC) on IGST paid through TR-6 Challans and confirmed that time limits under Section 16(4) apply to reassessed bills of entry in the case of M/S. Becton Dickinson India Private Limited.
M/s. Becton Dickinson India Private Limited, the appellant, a company engaged in the import and trading of medical equipment/devices, filed an appeal under Section 100(1) of the CGST/TNGST Act, 2017 against the Advance Ruling No.20/ARA/2025 dated 09.05.2025. The appeal was filed against the AAR's ruling on three specific queries related to the eligibility of ITC on import IGST paid via TR-6 Challans and the applicability of time limits for claiming ITC on reassessed bills of entry.
The appellant contended that a TR-6 Challan, when read with the Special Valuation Branch (SVB) order and customs authorities' letters, constitutes a valid 'tax paying document' under Rule 36(1)(d) of the CGST Rules. They further argued that the time limit prescribed under Section 16(4) of the CGST Act applies only to invoices or debit notes and not to bills of entry or TR-6 Challans.
The Appellate Authority, comprising Shri. Madan Mohan Singh, I.R.S., and Shri. S. Nagarajan, I.A.S., heard the appeal and analyzed the submissions. The Authority ruled that neither a TR-6 challan by itself nor when read with the SVB order and customs letters can be considered an eligible document for availing ITC.
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The AAAR clarified that a TR-6 challan is not a document prescribed under the Customs Act, 1962, and is not "similar" to a bill of entry, which is specifically prescribed. The Authority noted that CBIC Circular No. 16/2023 provides a specific procedure for such situations, which involves cancelling the 'Out of Charge' and reassessing the bill of entry, a route the appellant should have pursued.
Consequently, the question of whether a time limit applies to TR-6 challans was held as not arising, since they are not eligible documents for ITC in the first place. Regarding the time limit for ITC on reassessed bills of entry, the AAAR upheld the AAR's ruling, confirming that the time limit under Section 16(4) of the CGST Act is applicable.
The Authority reasoned that through Section 20 of the IGST Act, the provisions of the CGST Act apply 'mutatis mutandis' to IGST, thereby extending the time limit provisions to bills of entry used for IGST imports. The time limit for availing ITC on the differential IGST paid was confirmed to begin from the date of re-assessment of the bill of entry.
The bench dismissed the appeal, upholding the original AAR's ruling by clarifying that TR-6 Challans, even with supporting documents, are not eligible for claiming ITC on import IGST, and that the time limits for availing ITC under Section 16(4) are applicable to reassessed bills of entry.
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