Case Law Details
In re Sanghvi Movers Limited (GST AAAR Tamilnadu)
The appellant is eligible to avail full input tax credit of tax paid by SML Ho on the lease/hire of cranes to them for furtherance of business, subject to other conditions of eligibility to such credit as per section 16 of CGST/TNGST Act 2017
Applying the statutory provisions to the case at hand, we find that the Lower authority has examined and held that the supply in this case is one between distinct persons; the appellant is in possession of the Tax Invoice, the goods are sub-leased to the appellant for use in the furtherance of business; tax is paid by SML HO; returns are furnished. The Lower Authority has restricted the ITC to the amount of value set-off, i.e, it is held that the ITC is available only to the extent of payment of value by the appellant to their HO denying the exemption under proviso to Rule 37 of the CGST Rules available to supplies between the distinct persons. Therefore the issue to be decided is whether the appellant is eligible for the ITC of the entire tax paid by SML HO in the stated transactions.
From the various submissions before us, we find that this is a case which is covered by Schedule I of the CGST Act. The transaction is between distinct persons. The appellant in the tax invoice raised on their customers mentions that the payment to be made either by Cheque/DD in the name of `SANGHVI MOVERS LIMITED’ or directly to the account of SML HO at Pune. The appellant has represented that the receipts and payables are accounted at the entity level only. The HO being distinct person in the eyes of law and the transaction is in the course of furtherance of business, the supply is taxable supply for which SML HO has adopted a value agreed under the ‘Pricing’ clause of the MOU and paid the tax on the value declared in the Invoice. The proviso to Rule 37, provides for deemed payment of value in such transactions. Even considering that the said proviso does not have application in the case at hand as there is a value stated in the Tax Invoice as held by the Lower Authority, we find no reason to restrict the Input Tax Credit of the tax paid by the SML HO, in the hands of the appellant as it has been substantially brought out that the ‘consideration’ stands paid to the SML HO either by the customer of the Appellant or by setting off against the payables of the appellant to SML HO, in respect of lease/hire of Cranes, etc which is as per the established accounting principles. Therefore we do not find any reason to restrict the eligibility of ITC credit under Section 16 (2) of the Act, in the case at hand.
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING,
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