ITC disallowance for delayed GSTR-3B filing can be rectified within 6 months.

ITC Disallowance Due to GSTR-3B Delay; Assessee Directed to Comply with Rectification Circular

Issue: Whether the assessee, whose Input Tax Credit (ITC) was disallowed due to a delay in filing the GSTR-3B return for the Assessment Year 2018-19, can claim the ITC in light of the amendments made by the Finance Act 2024 and a subsequent revenue circular.

Facts:

The assessee’s ITC was disallowed due to a delay in filing the GSTR-3B return for the Assessment Year 2018-19.
The Finance Act 2024 inserted sub-section (5) in Section 16 of the CGST Act, extending the time for filing the return up to November 30, 2021.
The revenue issued a circular dated October 15, 2024, requiring assessees to file a rectification application under Section 148 within six months of the notification.

Decision:

The court acknowledged that a departmental procedure is now in place and that time is still available for the assessee to comply.
The court directed the assessee to comply with the circular requiring a rectification application under Section 148.
The writ petition was disposed of.

Key Takeaways:

Retroactive Benefit: The amendment by the Finance Act 2024 provides a retroactive benefit to assessees whose ITC was disallowed due to delayed GSTR-3B filings.
Departmental Circular: The revenue’s circular outlines the procedure for claiming the benefit of the amendment, requiring assessees to file a rectification application.
Compliance with Circular: Assessees must comply with the procedural requirements outlined in the circular to claim the ITC.
Time-Bound Rectification: The circular imposes a time limit for filing the rectification application, emphasizing the need for timely action.
Procedural Compliance: The court’s decision highlights the importance of adhering to procedural requirements to avail of the benefits granted by legislative amendments.
The court is directing the tax payer to follow the new procedure, and is not directly ruling on the ITC claim itself.

HIGH COURT OF ORISSA

Multi Services

Central Board of Indirect Taxes and Customs (CBIC)

Arindam Sinha and M.S. Sahoo, JJ.

W.P.(C) No. 24996 of 2024

OCTOBER 28, 2024

Mrs. Z.M. Wallace, Adv. for the Petitioner. A. Kedia, Jr. Standing Counsel for the Respondent.

ORDER

1. Mrs. Wallace, learned advocate appears on behalf of petitioner and submits, impugned is order in original dated 8^th April, 2024 made pursuant to demand-cum-show cause notice dated 21^st December, 2023 issued under section 73 in Central Goods and Services Tax Act and Odisha Goods and Services Tax Act, both of 2017. Pointing out from paragraph 5.6.3 of impugned order she submits, availed of Impugned Tax Credit (ITC) was disallowed on delay in filing of return by GSTR-3B.

2. She draws attention to section 118 in Finance Act, 2024 to submit, there was amendment by insertion of, inter alia, sub-section (5) in section 16 of the CGST Act, extending the time for filing of return for, inter alia, financial year 2018-19, up to 30^th November, 2021. She demonstrates from impugned order her client’s return was filed on 26^th November 2019. She hands up notification dated 27^th September, 2024 published by authority in the Gazette of India notifying coming into effect of the inserted amendment. She seeks interference for impugned order being set aside and quashed.

3. Mr. Kedia, learned advocate, Junior Standing Counsel appears on behalf of revenue and hands up circular dated 15^th October, 2024 issued by Central Board of Indirect Taxes and Customs, GST policy wing. He refers to clause 3.5 to submit, where no appeal has been preferred, the assessee must apply for rectification under section 148 within period of six months from date of issuance of the notification, being said notification dated 27^th September, 2024.

4. Petitioner has moved Court invoking writ jurisdiction on not having filed appeal. In the circumstances, said circular requiring petitioner to apply for rectification is to be complied with. This observation is on noticing that the circular was issued after the writ petition was presented. Considering departmental procedure is now in place for petitioner to comply with in having impugned order rectified and time for making the application is still available to petitioner, we dispose of the writ petition accordingly.

5. The writ petition is disposed of.