2026-VIL-270-GSTAT-HYD
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  2. 2026-VIL-270-GSTAT-HYD

SGST Tribunal

GST - Eligibility of Input Tax Credit under Section 16(2) of the CGST Act, 2017 for the period July 2017 to March 2018, Denial of credit on account of the mismatch - Burden of proof under Section 155 and effect of mismatch between Form GSTR-3B and Form GSTR-2A - Department alleged a mismatch between the ITC availed in Form GSTR-3B and the figures in Form GSTR-9 - Respondent contended that the requirement of Section 16(2)(c) is absolute and that, upon a mismatch, the burden under Section 155 lies on the Appellant to prove payment of tax by its suppliers - Whether the conditions of Section 16(2) stood satisfied and whether the burden under Section 155 was discharged - HELD - The condition (c) being the only point of contest, the burden lay on the Appellant under Section 155. The Appellant pointed to the reflection of the IGST on the invoices in Form GSTR-2A, the payment of the full consideration inclusive of tax as evidenced by bank statements, and its reconciliation, whereas the Respondent placed no material to show that the supplier had not paid the tax. The burden cast by Section 155 was therefore discharged on the record. Form GSTR-2A is only a facilitator for self-assessment and a difference between Form GSTR-3B and Form GSTR-2A may justify verification but cannot, without more, be treated as proof that Section 16(2)(c) has not been satisfied - The Appellant having discharged the burden, the mismatch by itself could not sustain the denial of credit – The appeal is allowed - Requirement of certificates under the Board Circular dated 27.12.2022 on difference between ITC availed in Form GSTR-3B and available in Form GSTR-2A for the Financial Years 2017-18 and 2018-19 - Demand was confirmed and the appeal was dismissed by the FAA solely on the ground that the Appellant did not produce the Chartered Accountant's certificate or the supplier's certificate contemplated by the Circular - Whether credit can be denied solely for non-production of the certificates contemplated by the Circular - HELD - The Circular requires the proper officer first to seek from the registered person the details of all invoices on which ITC was availed but not reflected in Form GSTR-2A, and then to ascertain the fulfilment of the conditions of Section 16 before seeking the certificates as a means of verifying Section 16(2)(c). The record did not disclose that the proper officer took this first step - The certificate is a means of verification and not a further condition of eligibility, and the Circular nowhere provides that the unmatched credit must be disallowed in its absence. Non-furnishing of the certificates may be relevant to the verification process but does not dispense with determination of the actual ITC liability by reference to the substantive statutory provisions applicable to the relevant period - The difference in the present case arose not from any failure of the suppliers to report the supplies but from the head under which the credit was availed - Denial of credit by the FAA solely for want of the certificates contemplated by the Circular cannot be sustained and set aside - Availment of credit of IGST charged on inter-State supply by an SEZ unit as CGST and SGST - Appellant availed credit equally under CGST and SGST on two invoices raised by an SEZ unit, though IGST was discharged on the supply and stood reflected in Form GSTR-2A - Respondent contended that CGST, SGST and IGST are distinct levies, that supplies by an SEZ unit are deemed inter-State supplies under Section 7(5)(b) of the IGST Act so that availment of CGST and SGST is a substantive contravention - Whether the credit equally availed under CGST and SGST on the inter-State supply is input tax credit wrongly availed so as to sustain the demand - HELD - By virtue of Section 7(5)(b) the supply was an inter-State supply and the tax chargeable was integrated tax, and the objection of the Respondent is directed to the head under which credit was availed and not to the absence of a supply or an invoice. The Hon'ble High Court of Kerala, on materially similar facts where IGST was reflected in Form GSTR-2A but the credit was availed under CGST and SGST, held that there was no wrong availment of credit and that the mistake was inadvertent and technical. The status of the supplier as an SEZ unit does not distinguish the case, as Section 7(5)(b) only fixes the inter-State character of the supply and leaves unaffected the fact that the tax charged was IGST. The decision binds the Tribunal, the High Court being a higher judicial forum - The contention that the High Court overlooked loss of revenue is unfounded since the concern was before it and was addressed by a direction to the GST Council - The credit equally availed under CGST and SGST is not ITC wrongly availed within the meaning of Section 73, the inadvertent error in the head of credit being an error of reporting and not an availment of credit to which the Appellant was not entitled - The denial of credit by the FAA is not sustainable and set aside - As that demand of tax does not survive, the interest and penalty confirmed on it cannot survive independently – The impugned order is set aside and the appeal is allowed
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