GST Circular No 237/2024
This circular clarifies how taxpayers can benefit from recent amendments to Section 16 of the Central Goods and Services Tax (CGST) Act. These amendments allow taxpayers to claim input tax credit (ITC) for purchases made between 2017-2021, even if they missed the earlier deadline.
Here’s a breakdown of the key points:
Retrospective Amendment: Section 16 of the CGST Act allows claiming ITC within 30 days after November following the financial year or filing the annual return (whichever is earlier). However, a recent amendment allows claiming ITC for purchases made between Financial Years 2017-2021 even if the deadline was missed.
No Refunds: The government won’t provide any refunds for taxes already paid or ITC already reversed due to the missed deadline.
Benefitting Taxpayers:
Taxpayers who received demand notices for wrongly claiming ITC due to the earlier deadline can now claim the credit under the new provisions. This applies if no order has been issued by authorities or if appeals are pending.
How to Claim the Benefit:
If no demand notice has been issued, the proper authorities will consider the new provisions. If a demand notice has been issued but no order has been passed, the authorities will consider the new provisions while issuing the order. If an order has been issued and appeals are pending, the appellate authorities will consider the new provisions. If an order has been issued but no appeal has been filed, taxpayers can apply for rectification under a special procedure notified recently (Notification No. 22/2024). The application needs to be filed within six months from the date of notification issuance.
Additional Information:
The rectification application for orders issued under specific sections of the CGST Act can be filed electronically on the GST portal. The application should include details about the wrongly claimed ITC and the reason for rectification. The proper officer will decide on the application within three months and upload a summary of the rectified order electronically. Taxpayers can appeal against the rectified order if it adversely affects them.
Further Clarifications:
This special rectification procedure is only applicable if the demand confirmation in the order relates to wrongly claimed ITC due to the earlier deadline in Section 16(4).
For other rectification needs, taxpayers can use the existing provisions of Section 161 of the CGST Act.
