Invoice Received but goods received on Later Date.

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anuj kumar khaitan (Querist)
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31 May 2025 We have received invoice on 31.03.2022 but goods were delivered in April-22.ITC for the invoice has been claimed during March-22 itself. The ITC for the Invoice has been disallowed by the revenue in GST Audit and SCN issued for the same. Is there any case law or way to defend the same in favour of the assessee.?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 May 2025 See the link.
https://taxguru.in/goods-and-service-tax/input-tax-credit-itc-goods-received-receive.html

Ram Avtar Singh

Ram Avtar Singh (Expert)
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31 May 2025 You are entitled to input GST after receiving goods or services, but you have taken input before receiving goods. It is a legal obligation.
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Section 16(2) of the Central Goods and Services Tax (CGST) Act, 2017, lays down the conditions under which a registered person is eligible to claim Input Tax Credit (ITC) on any supply of goods or services.

Here’s a breakdown of Section 16(2):

A registered person shall be entitled to the credit of any input tax only if the following conditions are satisfied:

Possession of a Tax Invoice or Debit Note: The person must have a tax invoice or debit note issued by a registered supplier or any other prescribed document.

Receipt of Goods or Services: The person must have received the goods or services. This also includes deemed receipt in case of third-party delivery or services provided through an agent.

Tax Payment to Government: The tax charged on such supply must have been actually paid to the government by the supplier — either in cash or through utilization of input tax credit.

Filing of Return: The recipient must have furnished the return under Section 39 (i.e., the GSTR-3B return).

Additionally, as per the proviso to Section 16(2):

If the goods are received in lots or installments, ITC can be claimed only upon receipt of the last lot or installment.

If the recipient fails to pay the supplier within 180 days from the date of the invoice, the ITC claimed will be added to the output tax liability, along with interest. However, once the payment is made, the ITC can be reclaimed.

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anuj kumar khaitan

anuj kumar khaitan (Querist)
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31 May 2025 Since the timeline for Claiming ITC for FY 21-22 has already passed hence the ITC which is being reversed by the department for Invoice on 31.03.22 cannot be claimed now and hence it is becoming a case of double taxation and undue hardship to the assessee even though their has been no loss to the revenue in such cases.

CA Rashmi Gandhi

CA Rashmi Gandhi (Expert)
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31 May 2025 The disallowance of ITC (Input Tax Credit) due to goods being received after the invoice date is based on Section 16(2)(b) of the CGST Act, which mandates receipt of goods as a condition for availing ITC. If the goods were delivered in April 2022, but ITC was claimed in March 2022, technically, the eligibility under Section 16(2)(b) was not met at the time of claim.

However, you may consider the following defenses and legal precedents:

1. Explanation to Section 16(2)(b): Deemed Receipt

If the goods were delivered to a transporter or a third party on the direction of the recipient, it might be treated as deemed receipt. Circular No. 241/35lGST dated 31.12.2024 clarified this, especially in cases involving Ex-Works contracts, stating that delivery to transporter on behalf of recipient qualifies as “receipt” of goods .

This could be argued if the transporter picked up the goods on your behalf in March 2022, even if they physically reached your premises in April 2022.

2. Judicial Precedent: Ecom Gill Coffee Trading Co. [2023]

The Supreme Court in Ecom Gill Coffee Trading Co. held that ITC requires proof of actual physical movement of goods. Mere possession of invoice is not sufficient. However, if you can provide proof that the goods were dispatched in March on your instructions (e.g., e-way bill, delivery challan, GRN), you could argue constructive receipt .

3. Subsequent Correction: Rule 37(4)

If the ITC was wrongly claimed, it could be reversed in the next return and re-availed in the month of actual receipt (April 2022), provided it falls within the time limit under Section 16(4). If done voluntarily, this could mitigate penalties and interest.

4. Relief from Penalty: Bonafide Mistake

Since this is a procedural lapse, and assuming no fraudulent intent, you may rely on CBIC’s instructions discouraging prosecution for technical errors or interpretative disputes, particularly when the credit was genuine and the goods were ultimately received and used .