No ITC on invoices raised for the past period as hit by Period of Limitation

The AAR, Andhra Pradesh, in the matter of M/s. Vishnu Chemicals Limited, [AAR No.21lAP/GST/2021 dated July 20, 2021] has held that no Input Tax Credit ("ITC") on monthly rental tax invoices raised after the expiry of the period of limitation.

Facts

M/s. Vishnu Chemicals Limited ("the Applicant") is engaged in manufacture of BasicChromium Sulphate, Sodium Sulphate and Chromic Acid. For the purpose ofstoring the raw materials and finished goods, the Applicant needed some additional storage space and therefore, entered into lease agreement with M/s Usha Tubes and Pipes Pvt. Ltd ("M/s UTPL").

The Applicant submitted that, for the period April 2018 to March 2019, M/s UTPL issued a single tax invoice mentioning in the description as "Rental charges" for the month from April 2018 to March 2019 by showing rent month-wise for 12 months.

The Applicant contended that, as per Section 16(4) of the Central Goods and Services Tax Act, 2017 ("the CGST Act")for the tax invoice dated April 1, 2020, the Applicant is entitled to claim ITC on or before filing the GSTR 3B for September 2021 or the date of filing of Annual Return for the year 2020-2021, whichever is earlier.

The Applicant further submitted that, the restriction under Section 16(4) of the CGST Act does not apply to the aforesaid tax invoice dated April 1, 2020issued in the instant case for renting services supplied in the year 2018- 2019. Therefore, the Applicant is entitled to avail ITC for the aforesaid tax invoice.

Issue

• Whether the tax invoice dated April 1, 2020issued by M/s UTPL forrental service for the year 2018-19 is hitby the limitation for claiming ITC under Section 16(4) of the CGSTAct.
• Whetherthe tax invoice dated April 1, 2020is eligible for ITC if claimed before filing GSTR 3B return for September 2021 or Annual return for the year 2020-21in terms of Section 16(4) of the CGST Act.

Held

The AAR Andhra Pradesh, in the matter ofAAR No.21lAP/GST/ 2O21 dated July 20, 2021, held as under:

• Observed that, for any transaction, the tax invoice is the primary document evidencing the supply and vital for availing ITC. The tax invoice is issued by the Applicant on April 1, 2020 for the services supplied in theyear 2018-2019.
• In the present case, it is evident that, the tax invoicehasnotbeenissued by the Applicant withina period of thirty days from the date of the supply of service.
• Held that, the Applicant is not entitled to take ITCUnder Section16(4) of the CGST Act.