ITC on invoice issued on 1.04.2020 for services of FY 2018-19 is not claimable
Facts and Issues of the case:
The applicant, M/s. Vishnu Chemicals Limited is engaged in manufacture of Basic Chromium Sulphate, Sodium Sulphate and Chromic Acid falling under HSN 28332990, 28331100 and 28191000. For the purpose of storing the raw material as well as finished goods, the applicant needed some additional storage space and therefore, entered into lease agreements with M/s. Usha Tubes and Pipes Pvt. Ltd., Visakhapatnam (GSTIN:37AAACU7175R1ZG) (referred to as “UTPL”) for leasing of god owns situated at UTPL Campus, Mindi, Gajuwaka, Visakhapatnam.
The applicant submitted that monthly rental bills were received from M/s UTPL regularly till March 2018. But for the months from April 2018 to March 2019, M/s UTPL issued a single tax invoice bearing No. UTPL0919117KVC dated 01.04.2020 mentioning in the description as Rental charges for the months from April 2018 to March 2019 by showing rent month-wise for 12 months. The invoice mentioned CGST as 26,64,090/- and SGST of Rs. 26,64,090/- on total taxable value of Rs. 2,96,01,000. The applicant has approached this authority seeking a ruling whether the invoice dated 01.04.2020 is eligible for input tax credit if claimed before filing GST return for September 2021 or Annual return for 20-21 in terms of Sec 16(4).
The applicant had filed an application in form GST ARA-01 dated 12.03.2021 by paying required amount of fee for seeking Advance Ruling.
Observations by the Court
The court has examined the records of the case and considered the submissions made by the applicant. The issue at hand is whether the tax invoice dated 01.04.2020 issued by the supplier of service for the rental service supplied for the period 01.04.2018 to 31.03.2019 is hit by the limitation for claiming ITC under Section 16(4) of the CGST/SGST Act, 2017 or not.
In the instant case the ‘tax invoice’ is issued by the lessor on 01.04.2020 for the services supplied in the financial year 2018-2019. For any transaction, the tax invoice is the primary document evidencing the supply and vital for availing input tax credit. If we look into the present case, it is evident that the invoice has not been issued within the stipulated time as prescribed by the act.
In the instant case, the invoice which was raised on 01.04.2020 does not pertain to that financial year of 2020-2021, but pertains to the financial year of 2018-2019 in which the services were received. Moreover, as per section 16(4) the applicant was mandated to claim input tax credit before the due date of furnishing of the return under section 39 for the month of September 2019 following the end of financial year 2018-2019 to which such invoice pertains or furnishing of the relevant annual return for the year 2018-2019, whichever is earlier. In such a context, we are of the opinion that the applicant is not entitled to take credit of input tax under section 16(4) as it does not fulfill the basic condition that the invoice should pertain to the financial year 2018-2019 where in the supplies are made and for which the tax invoices are supposed to be raised as prescribed by the act. Thus, Act necessitates the applicant to claim input tax credit as per the conditions prescribed under the act.
Question: Whether the tax invoice dated 01.04.2020 issued by the supplier of servicfor the rental service supplied for the period 01.04.2018 to 31.03.2019 is hit by the limitation for claiming ITC under Section 16(4) of the CGST/SGST Act, 2017.
Answer: The invoice referred pertains to the services rendered in the financial year 2018-2019 and hence it is ‘hit by the limitation for claiming ITC’ under Section 16(4).
Question: If the applicant avails ITC on such invoice after 01.04,2020 and before filing GST return for September 2021/Annual Return for 2020-2021, whether it amounts to violation of condition stipulated under sub-section(4).