Article
Availing GST credit using TR-6 Challan: Navigating the uncertainty
ByAsish Philip, Srinidhi Ganeshan, Mahi Vyas, Kratik Patni
The article in this issue of Indirect Tax Amicus dives deep into the question of availability of input tax credit when IGST is paid on imports using TR-6 Challan, i.e., due to various circumstances much after the import. Observing that the CGST Rules do not explicitly mention TR-6 Challan as a valid document for availing ITC, the authors note that this has led to a dispute as to whether the TR-6 Challan qualifies as a ‘similar document prescribed’ under Rule 36(1)(d). Considering various case law – both under the GST regime and for period before 1 July 2017, the authors state that absence of expression ‘TR-6 Challan’ in Rule 36 and the fact that CBIC Circular No. 16/2023-Cus. dated 7 June 2023 expressly mentions that TR-6 Challan is not a valid document for availing ITC, should not lead to disallowance of an otherwise legal and valid claim. Also, noting that the problem regarding availing of credit of IGST paid might continue to exist even in cases where assessee avails the benefit under Section 18A of the Customs Act, the authors state that the GST Council should issue clarification to achieve ease of doing business.
Goods and Services Tax (GST)
Ratio decidendi
- Blocking of ITC – Mandatory to record reasons to believe in writing – Reason ‘supplier found non-functioning’ not fulfils requirements of Rule 86A – Allahabad High Court
- Refund of IGST paid when sale found to be intra-State – Principles of restitution and unjust enrichment applicable – Refund claim held not barred by limitation – Karnataka High Court
- Refund of unutilized ITC to EOU when supplier of inputs to EOU never claimed deemed export benefit – Gujarat High Court
- Notice under Rule 142(1)(A) is required after completion of scrutiny of returns under Section 61 for period prior to 15 October 2020 – Andhra Pradesh High Court
- Penalty under Section 122 – ‘Taxable person’ in case of fake, fraudulent firms would be the person who got such firms created – Delhi High Court
- Confiscation and penalty – Contravening provisions of the Act would also include abuse of process of law – Discrepancies in investigation and seizure when not fatal – Rajasthan High Court
- ITC cannot be recovered from recipient in case of default by supplier unless proceedings initiated against supplier – Kerala High Court
- Appeal to Appellate Authority – No pre-deposit required for appeal filed before 1 October 2025 against order demanding penalty or interest – Calcutta High Court
- Appeal to Appellate Authority – Amount paid under protest and not appropriated against any demand can be treated as pre-deposit – Allahabad High Court
- Right to file appeal cannot be taken away even if tax to be paid is showing as Nil – Allahabad High Court
- Exemption to DGCA approved flight training courses – CBIC Circular dated 11 October 2024 clarifies position from date of issuance of Notification No. 12/2017-CT(R) – Allahabad High Court
- Jammu & Kashmir – Cross-LoC trade is intra-State trade liable to GST – Jammu & Kashmir High Court
- Bunching of show-cause notices when permissible – Jammu & Kashmir High Court
Customs and FTP
Notifications and Circulars
- Manufacture and other operations in warehouse/special warehouse – Online module launched for permissions under Section 65
- Advance authorisations’ redemption in cases affected by erstwhile Rule 96(10) of CGST Rules – EODC not to be withheld in specified cases
Ratio decidendi
- EPCG scheme – No requirement of earning of foreign exchange only from exclusive use of imported capital goods – CESTAT New Delhi
- EODC by competent authority is determinative of fulfilment of EO – CESTAT New Delhi
- No confiscation for delay in registering under Paper Import Monitoring System, which is only a procedural lapse – CESTAT New Delhi
- EOU – Exemption when item not mentioned in SION but included as input in MEPZ LUT permission – CESTAT Chennai
- Confiscation – No misdeclaration merely because officer redetermined value by different method – CESTAT New Delhi
- Penalty – No misdeclaration even if another importer imported identical goods from same exporter at different prices – CESTAT New Delhi
- Multi-functional audio video equipment also having radio broadcast receivers, with principal function of amplification, is classifiable under CTI 8518 40 00 – CESTAT Mumbai
Central Excise, Service Tax and VAT
Ratio decidendi
- ‘Perk’ is a wafer biscuit, is not covered as ‘communion wafers’ and is classifiable under TI 1905 32 90 – Supreme Court
- No service tax on telephone charges waived off to employees up to a certain limit – Supreme Court
- No Real Estate Agent Service when assessee transferring title of land to buyer after negotiating price with owners and procuring Power of Attorney to execute sale – Supreme Court
- Valuation (Central Excise) – Value of bought out items received directly at buyer’s site and used in erection of a boiler is not includible in value of the boiler – Supreme Court
- Education Cess abolished in 2015 cannot be transitioned to GST regime in 2017 – Refund not permissible under CGST Section 142(3) – CESTAT Larger Bench
- Cenvat credit of tax paid to contractor for maintaining fly ash collection facility at a power plant when eligible to a cement factory – CESTAT Chennai
- Peanut Butter and Margarine are similar edible preparations – CESTAT Hyderabad