Rectification of GST Orders Allowed for Wrong Availment of Input Tax Credit

Issue: Whether taxpayers can rectify orders related to the wrong availment of Input Tax Credit (ITC) under the special procedure provided by Notification No. 22/2024-Central Tax.

Facts:

Notification No. 22/2024-Central Tax, dated October 8, 2024, allows taxpayers to file applications for rectification of orders related to wrong ITC availment.
This applies to orders passed under Sections 73 and 74, or in appeals under Sections 107 and 108 of the CGST Act, 2017.
The deadline for filing such applications is six months from the date of notification, which is April 15, 2025.

Decision:

The court held that taxpayers can file applications for rectification of relevant orders until April 15, 2025.
Any such applications must be decided by the authorities, keeping in mind the provisions of Sections 16(5) and 16(6) of the CGST Act, 2017, which deal with the time limits for claiming ITC.

Key Takeaways:

This case clarifies the procedure and timeline for rectifying GST orders related to incorrect ITC claims.
Taxpayers who have been affected by such orders have an opportunity to seek rectification until April 15, 2025.
The decision emphasizes the importance of Sections 16(5) and 16(6) in determining the validity of ITC claims and rectification requests.

HIGH COURT OF PUNJAB & HARYANA

North Agro Industries (P.) Ltd.

Union of India

Sanjeev Prakash Sharma and SANJAY VASHISTH, JJ

CWP No. 15400 of 2024 (O & M)

DECEMBER 10, 2024

Vikrant Kackria, Adv. for the Petitioner. Sunish Bindlish, Sr. Standing Counsel for the Respondent.

ORDER

Sanjeev Prakash Sharma, J.- Learned counsel for the petitioner refers to circular issued by the Ministry of Finance, dated 15.10.2024, wherein, the issue regarding implementation of the provisions of sub-Sections (5) and (6) of Section 16 of the Central Goods and Services Tax Act, 2017 (for short ‘CGST Act’), which has been inserted vide the Finance Act, 2024 with retrospective effect from 01.07.2017, has been clarified. As per the aforesaid circular, time limit to avail input tax credit under the provisions of sub-Section (4) of Section 16 of the CGST Act, has been extended retrospectively. Resultantly, it has been clarified that in cases where action has been taken under Sections 73 or 74 of the CGST Act or orders have been passed in appeal under Section 107 or Section 108 of the CGST Act, holding wrong availment of the input tax credit, the concerned tax payer has been allowed to move application for rectification of such order.

2. As per the special procedure laid down under Section 148 of the Act as notified vide notification No.22/24 dated 08.10.2024, the taxpayers would be allowed to move application for rectification within six months from the date of issuance of notification i.e. 15.10.2024, thus, upto 15.04.2025 rectification application can be moved. It would be apposite to quote para 3.5 of notification dated 15.10.2024, which reads as under:-

” Where order under section 73 or section 74 of the CGST Act has been issued but no appeal against the said order has been filed with the Appellate Authority, or where the order under section 107 or section 108 of the CGST Act has been issued by the Appellate Authority or the Revisional Authority but no appeal against the said order has been filed with the Appellate Tribunal:

In such cases, where any order under section 73 or section 74 or section 107 or section 108 of the CGST Act has been issued confirming demand for wrong availment of input tax credit on account of contravention of provisions of sub-section (4) of section 16 of the CGST Act, but where such input tax credit is now available as per the provisions of sub-section (5) or subsection (6) of section 16 of the CGST Act, and where appeal against the said order has not been filed, the concerned taxpayer may apply for rectification of such order under the special procedure under section 148 of the CGST Act notified vide Notification No. 22/2024 – Central tax dated 08.10.2024, within a period of six months from the date of issuance of the said notification. “

3. Keeping in view the above, we dispose of this writ petition and allow the petitioner to move an application accordingly. It is expected that if any such application for rectification is moved, the same shall be decided keeping in view the provisions of sub-Sections (5) and (6) of Section 16 of the CGST Act, 2017. The writ petition is accordingly disposed of.

4. All pending misc. application(s) also stand dismissed.