Case Law Details
In re National Aluminium Comapany Ltd. (GST AAR Odisha)
Introduction: M/s National Aluminum Company Ltd. (hereinafter referred to as the ‘Applicant’) sought an advance ruling under Section 97 of the CGST Act, 2017, and Section 97 of the OGST Act, 2017. The primary question raised was whether the Compensation Cess paid on the purchase of coal, remaining as unutilized Input Tax Credit (ITC) in the electronic credit ledger, continues to be available or if the Applicant is required to reverse the same.
Background: The Applicant, engaged in the manufacture and supply of aluminum metal and alumina, faced a challenge regarding the accumulated unutilized ITC of Compensation Cess paid on the procurement of coal. The Compensation Cess, as specified under the GST (Compensation to States) Act, 2017, is applicable to certain goods, including coal.
Applicant’s Submission: The Applicant highlighted that, due to the restriction on the utilization of ITC of Compensation Cess, as mandated by the proviso to Section 11 of the GST (Compensation to States) Act, 2017, they were unable to use the credit for GST payment on outward supplies. The unutilized amount of Compensation Cess remained accumulated in the Electronic Credit Ledger since July 2017.
Legal Framework: Section 97(2) of the CGST Act, 2017, provides an exhaustive list of issues/questions on which an advance ruling can be sought. The questions include matters related to the classification of goods or services, applicability of notifications, determination of time and value of supply, admissibility of ITC, liability to pay tax, registration requirement, and whether a transaction results in a supply of goods or services.
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