2026-VIL-120-AAR
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SGST Advance Ruling Authority

GST – West Bengal AAR - Input Tax Credit Reclaim after Retrospective Amendment to Section 16(5) of CGST Act, 2017 – Applicability of Section 150 Finance Act 2024 - Applicant availed Input Tax Credit on invoices issued by a service provider during January, February and March 2020. The supplier filed its returns in November 2020, beyond the prescribed timeline. Consequently, the applicant reversed the entire Input Tax Credit pursuant to earlier Advance Ruling Order. Subsequently, Section 16(5) of the CGST Act was inserted retrospectively with effect from 01.07.2017 through the Finance Act 2024, which permits claiming Input Tax Credit for specified financial years in returns filed up to 30.11.2021, notwithstanding the earlier restriction in Section 16(4) - Whether, in view of the insertion of Section 16(5) of the CGST Act 2017 through the Finance Act 2024 which operates retrospectively with effect from July 2017, the applicant is entitled to reclaim the Input Tax Credit on inward supplies pertaining to January, February and March 2020 that had already been reversed pursuant to the earlier Advance Ruling dated 09.08.2021 – HELD - Although the Section 16(5) extends the date for claiming Input Tax Credit for financial years 2017-18 to 2020-21 up to 30.11.2021, it does not override or modify the other substantive conditions prescribed under Section 16(2) of the CGST Act, which remain applicable during the material period. The condition under Section 16(2)(c) requires that the tax charged must be actually paid to the Government. The supplier's delayed upload of invoice details in November 2020 for supplies made in January-March 2020 resulted in violation of Rule 36(4) of the CGST Rules regarding the 10 percent restriction on input tax credit for invoices not uploaded by suppliers within the prescribed period – Further, the reclaim of reversed Input Tax Credit constitutes a refund within the meaning of Section 150 of the Finance Act 2024, which expressly excludes refund of input tax credit reversed. The authority rejected the applicant's narrow interpretation of the term refund confined only to Section 54 of the CGST Act, as such interpretation would render the word reversed meaningless in Section 150 and create absurd results where cash payments would not be eligible for refund while input tax credit claims would be, contrary to established legal principles against absurd interpretations - The applicant is not entitled to reclaim the ITC previously reversed – Ordered accordingly
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