ITC can’t be availed if seller had failed to discharge GST on such supply: AAR

Case Details: Authority for Advance Rulings, Punjab Vimal Alloys (P.) Ltd., In re - [2023] 148 taxmann.com 240 (AAR-PUNJAB)

Judiciary and Counsel Details

• • Varinder Kaur & Viraj Shyamkarn Tidke, Member

Facts of the Case

The applicant was running a furnace and procuring ferrous alloys, scrap, gas and other materials. It filed an application for advance ruling to determine whether it would be entitled to claim ITC on purchases made from seller who had discharged tax liability on same but preceding seller had failed to discharge such tax liability.

AAR Held

The Authority for Advance Ruling observed that as per Section 16(2)(c) of CGST Act, 2017, the tax charged in respect of impugned supply is required to be actually paid to Government either in cash or through utilisation of admissible ITC in order to avail ITC. The ITC can’t be availed/claimed if seller or preceding seller fails to discharge GST on such supply. Therefore, it was held that in case seller or any preceding seller would fail to discharge GST on the impugned supply, then the applicant would not be eligible to avail ITC on such supply.