ITC cannot be denied due to non-reflection in Form GSTR-2A

ITC cannot be denied due to non-reflection in Form GSTR-2A

Diya Agencies v. The State Tax Officer & Ors., Kayamkulam1

In a recent ruling, the Kerala High Court (‘High Court’) held that Input Tax Credit (‘ITC’) cannot be denied merely on the ground that the invoice details are not appearing in Form GSTR-2A.

Arguments by the Petitioner:

• The Petitioner has fulfilled all the conditions prescribed in Section 16(2) of the Central Goods and Services Tax Act, 2017 and paid the amount of tax to the supplier.

• The Petitioner does not have any control over reflection of data in Form GSTR-2A.

• Press Release issued by the Ministry of Finance dated October 18, 2018, clarified that Form GSTR-2A is for taxpayer’s facilitation and does not impact the ability of taxpayer to avail ITC. This was considered by the Hon’ble Supreme Court in UOI v. Bharti Airtel & Ors.2.

• The Calcutta High Court in Suncraft Energy Pvt. Ltd. v. The Assistant Commissioner, State Tax, Ballygunge 3 held that due to dispensation of Form GSTR-2A, its non-performance or non-operability

will not have a consqeuence to ITC eligibility. Also, unless a collusion is established between the recipient and the selling dealer, ITC cannot be denied to the recipient.

High Court ruling:

• If the supplier has not remitted the amount to the Government, the Petitioner cannot be held responsible.

• The Petitioner is required to discharge the burden of genuineness of the transaction and proof of remittance of tax to the selling dealer as per the ruling of Supreme Court in The State of Karnataka v. M/s. Ecom Gill Coffee Trading Pvt. Ltd.

• Basis the above, the High Court held that ITC cannot be denied only on the ground that the said amount was not reflecting in the Form GSTR-2A.

• Accordingly, the Court remanded the matter to the assessing officer with the direction to pass a fresh order based on the examination of evidence as submitted by the Petitioner.

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(The views expressed in this article are strictly personal.)

By GST Info Tamil

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