The Andhra Pradesh High Court in its recent judgment in the case Thirumalakonda Plywoods v. The Assistant Commissioner has inter alia held that, mere acceptance of GSTR-3B returns with late fee will not exonerate the delay in claiming Input Tax Credit (ITC) beyond the period specified under section 16(4) of the CGST Act. Further it has held by upholding Section 16(4) of the CGST Act that ITC under GST Law is a concession / benefit and not a statutory right.
Issues dealt in the Order:
- Whether by virtue of imposition of time limit for claiming ITC, Section 16(4) of the CGST Act violates Article 14, 19(1)(g) and 300A of the Constitution of India?
- Whether Section 16(2) of the CGST Act, would prevail over section 16(4) of CGST Act, and thereby if the conditions laid down in Section 16(2) of the CGST Act are fulfilled, the time limit prescribed under section 16(4) of the CGST Act for claiming ITC will pale into insignificance?
- Whether the acceptance of Form GSTR-3B returns of March 2020 filed on November 27, 2020 by the Petitioner with a late fee of INR 10,000 will exonerate the delay in claiming the ITC beyond the period specified under Section 16(4) of the CGST Act?
Order of AP High Court
The Andhra Pradesh High Court in held as under:
- The time limit prescribed for claiming ITC under section 16(4) of the APGST Act / CGST Act is not violative of Articles 14, 19(1)(g) and 300-A of the Constitution of India.
- Section 16(2) of the CGST Act has no overriding effect on Section 16(4) of the APGST Act / CGST Act as both are not contradictory with each other. They will operate independently.
- Mere acceptance of Form GSTR-3B returns with late fee will not exonerate the delay in claiming ITC beyond the period specified under section 16(4) of the CGST Act.
Our Comments:
Section 16(4) of the CGST Act, 2017 allows availing of ITC until 30th November after the end of the financial year or furnishing the relevant Annual Return, whichever is earlier. The Andhra Pradesh High Court by upholding Section 16(4) and also adjudging that Section 16(2) does not have overriding effect on Section 16(4), has upheld the validity of this timeline.
READ / DOWNLOAD JUDGMENT:
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
