Case Law Details
In re Norbe Pharmacy LLP (GST AAR West Bengal)
In re Norbe Pharmacy LLP casee Authority for Advance Rulings (AAR), West Bengal, clarified its inability to provide a ruling on specific issues pertaining to delays in filing ITC-01 and availing Input Tax Credit (ITC) on closing stock.
The applicant, Norbe Pharmacy LLP, was registered under the GST composition scheme from April 1, 2022, to July 27, 2022. They ceased to pay tax under this scheme due to crossing the threshold limit. The applicant sought to avail Input Tax Credit (ITC) on their closing stock but faced difficulties in filing FORM GST ITC-01 within the stipulated time due to software and bulk item management issues.
The legal framework in question is largely outlined under the Central Goods and Services Tax Act, 2017 (CGST Act) and the West Bengal Goods and Services Tax Act, 2017 (WBGST Act). Under section 18 of the GST Act read with sub-rule (1) of rule 40, a registered person ceasing to pay tax under section 10 is entitled to take credit of input tax in respect of inputs held in stock. However, this needs to be declared in FORM GST ITC-01 within 30 days.
The AAR clarified that questions regarding the delay in filing ITC-01 and availing ITC on closing stock do not fall under the permissible categories of questions on which it can issue a ruling, as per sub-section (2) of section 97 of the GST Act. In addition, the application did not meet the fee requirement, which further led to its rejection.
The ruling highlights the limitations of AAR’s scope and sends a clear message that not all tax-related queries can be settled by this authority. It also implies that businesses must be vigilant in complying with the statutory deadlines to avoid potential pitfalls.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING,WEST BANGAL
1.1 At the outset, we would like to make it clear that the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression ‘GST Act’ would mean the CGST Act and the WBGST Act both.
1.2 The fact of the case as it appears from the submission made by the applicant in FORM GST ARA-01 is that the applicant was registered under composition scheme for the period from 1st April, 2022 to 27th July, 2022 and thereafter ceases to pay tax under section 10 on account of crossing the threshold limit.
1.3 In terms of clause (c) of sub-section (1) of section 18 of the GST Act read with sub-rule (1) of rule 40 of the Central Goods and Services Tax Rules, 2017 (the CGST Rules, for short) and the West Bengal Goods and Services Tax Rules, 2017 (the WBGST Rules, for short), where any registered person ceases to pay tax under section 10, he shall be entitled to take credit of input tax in respect of inputs held in stock, inputs contained in semi-finished or finished goods held in stock and on capital goods on the day immediately preceding the date from which he becomes liable to pay tax under section 9 and to avail such credit of input tax, the registered person shall make a declaration, electronically, on the common portal in FORM GST ITC-01 within a period of thirty days from the date of becoming eligible to avail the input tax credit under sub-section (1) of section 18 , or within such further period as may be extended by the Commissioner by a notification in this behalf.
1.4 The applicant has submitted that FORM GST ITC-01 could not be filed due to software and bulk items which were there in stock and proper accounting of the same.
1.5 The applicant has filed this application under sub section (1) of section 97 of the GST Act and the rules made there under raising following questions vide serial number 14 of the application in FORM GST ARA-01:
(a) How to condone the delay in filing ITC – 01?
(b) Whether the delay in filing ITC -01 be condoned?
(c) How to avail the ITC of the closing stock lying on 27th July, 2022?
1.6 An applicant desirous of obtaining an advance ruling is required to file an application on the common portal in FORM GST ARA-01 accompanied by a fee of five thousand rupees under the CGST Act and the WBGST Act both. However, the instant application is found not to be supported by such payment of required fee.
1.7 Further, as per sub-section (2) of section 97 of the GST Act, the question on which the advance ruling is sought under this Act, shall be in respect of, —
(a) classification of any goods or services or both;
(b) applicability of a notification issued under the provisions of this Act;
(c) determination of time and value of supply of goods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term.
1.8 The questions on which advance ruling is sought by the applicant are found not to be covered under any of the aforesaid clauses.
1.9 The applicant was initially asked to appear on 04.05.2023. But none appeared on the appointed date nor was any communication made from the end of the applicant. Thereafter, the applicant has been allowed two more opportunities, one of which is upon due consideration of the prayer for adjournment made by the applicant through e-mail. However, neither the applicant nor his authorised representative could manage to appear on any of the appointed dates. We are, therefore, of the opinion that the applicant has been allowed sufficient opportunities of being heard.
1.10 Now we proceed to dispose of the application considering the facts of the case, questions raised by the applicant and non-payment of requisite fee. Based on the facts stated earlier that the questions on which advance ruling is sought by the applicant are not covered under any of the clauses under sub-section (2) of section 97 of the GST Act and the application has been filed without making payment of requisite fee referred to in sub-section (1) of section 97 of the GST Act read with sub-rule (1) of rule 104 of the Central Goods and Services Tax Rules, 2017 and the West Bengal Goods and Services Tax Rules, 2017, we are of the view that there may not be any reason to accept the application made by the applicant for pronouncement of ruling. The application, therefore, is rejected.
