ITC cannot be claimed on debit notes issued in FY 2020-21 pertaining to the transactions made in FY 2018-19

Last updated: 01 July 2021

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The Gujarat Authority for Advance Ruling (AAR) has ruled that Input Tax Credit (ITC) cannot be claimed on debit notes issued in the financial year 2020-21 if they relate to transactions that occurred in the financial year 2018-19. The AAR clarified that even with amendments to Section 16(4) of the CGST Act, the ITC for a debit note is linked to the financial year of the original invoice, not the year the debit note was issued. Therefore, the applicant was not eligible to claim ITC on the debit notes in question.

Court :
AAR Gujarat

Brief :
The AAR, Gujarat in the matter of M/S I-Tech Plast India Pvt. Ltd. [Advance Ruling No. GUJ/GAAR/R/10/2021 decided on January 20, 2021] held that, Input Tax Credit ('ITC') in relation to Central Goods and Services Tax ('CGST') and State Goods and Services Tax ('SGST') charged separately, cannot be claimed on Debit Notes ('DN') issued by the supplier in current Financial Year ('FY') i.e. 2020-21, towards the transactions for the period 2018-19. Further held that, even after amendment in Section 16(4) of the Central Goods and Services Tax Act, 2017 ('CGST Act'), the ITC on DN should be seen w.r.t. the FY for which corresponding invoices were issued instead of FY in which DN were issued.

Citation :
Advance Ruling No. GUJ/GAAR/R/10/2021 decided on January 20, 2021

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