No, the Telangana, AAR in the matter of M/s. Noori Travels [TSAAR ORDER NO. 08/2024 dated 01.05.2024] ruled that the credit on a motor vehicle cannot be claimed by the assessee if the supplier has shown the transaction in the period wherein the recipient was claiming the benefit of the lower rate on the ground that the GSTR-1 filed by the supplier being a statutory return should be given more weightage than the invoice copy raised by the supplier. The Telangana AAR noted that the Applicant was rendering passenger transport service which is covered under SAC heading 9964 where the assessee has the option to pay GST at the rate of 5% or 12%. In case the assessee opts to pay GST @5% in such case the assessee is not eligible to claim ITC on goods and services used in the supply of the services. Whereas, in case the assessee opts to pay GST @12% in that case it is eligible to claim ITC. The AAR observed that the Applicant purchased a motor vehicle and the details of such purchase were reported by his supplier in GSTR-1 of July 2023 and stated that since the supplier has reported such purchase in GSTR-1 in July which is a statutory return filed on the common portal and stand on a higher pedestal as evidence when compared to the physical invoice held by the Applicant. The AAR ruled that the supply of the car was made in July 2023 when the Applicant was still availing the lower rate of tax on his supplies by forfeiting his right to claim the input tax credit on the purchase of goods and services and hence the ITC pertaining to the purchase of a car is not available to the Applicant.
Author’s Comments:
This kind of approach adopted by the AARs (creatures of the Statute) renders the “due process” laid down in the statue “Superfluous, unnecessary, and nugatory”, which is impermissible in the law. The input tax credit is a vested and indefeasible right of the taxpayer, post fulfillment of the conditions laid down in section 16 of the CGST Act. There is no provision under GST law which restricts registered person to claim ITC on invoices auto-populating in GSTR-2B of previous month, rather section 16(2)(b) provides that ITC must be claimed when goods or services or both are received. In the instant case, credit must have been allowed to the Applicant.
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