ITC Denial Based on GSTR-3B & GSTR-2A Mismatch Set Aside as Import Data Was Missing from GSTR-2A

Biocon Limited Vs State of Karnataka (Karnataka High Court)

ITC on import of goods and SEZ procurements cannot be denied for FY 2018-19 as GSTR 2A did not capture Import data during impugned period: Karnataka High Court

The Karnataka High Court held that Input Tax Credit (ITC) relating to imports and SEZ procurements for FY 2018-19 cannot be denied merely due to mismatch between Form GSTR-3B and Form GSTR-2A, since GSTR-2A, by design, did not capture such transactions during the relevant period. The Court observed that the petitioner had inadvertently disclosed import and SEZ-related ITC under the wrong table in GSTR-3B, which was subsequently rectified in GSTR-9 filed within the prescribed timeline. It further noted that Bill of Entry is the statutory document for availing ITC on imported goods under Rule 36(1)(d), and prior to insertion of Section 16(2)(aa) with effect from January 1, 2022, there was no legal requirement to match such credits with GSTR-2A. Accordingly, the Court quashed the demand of ₹20.01 crore raised solely on GSTR-3B versus GSTR-2A mismatch and remanded the remaining issues for fresh adjudication.

Facts:

• Biocon Limited (“the Petitioner”) is engaged in the manufacture and supply of pharmaceutical products and is duly registered under the CGST Act, 2017 and KGST Act, 2017.
• For FY 2018-19, the Petitioner imported goods and procured goods from Special Economic Zone (“SEZ”) units. The ITC pertaining to such import of goods (Rs. 7,73,73,105/-) and SEZ procurements (Rs. 13,68,11,797/-) was inadvertently reported in Form GSTR-3B under Table 4(A)(5) (“All Other ITC”) instead of Table 4(A)(1) (specifically meant for “Import of Goods”).
• This reporting error was subsequently rectified by the Petitioner in Form GSTR-9 (Annual Return) by correctly disclosing the said credits under Table 6E (“Import of goods including supplies from SEZ”), filed prior to October 31, 2020.
• The Deputy Commissioner of Commercial Taxes, Audit-4.7 (“the Respondent”) initiated audit proceedings and issued pre-intimation in Form GST DRC-01A dated December 06, 2023 proposing liability of Rs. 1,15,15,27,040/- under Section 73(5) of the CGST/KGST Act.
• Thereafter, a Show Cause Notice (“SCN”) dated December 29, 2023 was issued under Section 73(1) of the CGST/KGST Act demanding Rs. 90,82,01,601/- along with interest and penalty.
• Pursuant to the Petitioner’s detailed reply and personal hearing, the Respondent passed Order-in-Original dated February 22, 2024 (“Impugned Order”) under Section 73(9) of the CGST/KGST Act confirming tax demand of Rs. 30,37,84,642/- along with interest of Rs. 29,14,02,162/- and penalty of Rs. 3,03,78,464/-. Out of the said demand, Rs. 20,00,82,381/- pertained solely to alleged excess availment of ITC on account of GSTR-3B vis-à-vis GSTR-2A mismatch.
• The Respondent rejected the Petitioner’s reconciliation on the ground that GSTR-9 is not a return for availing ITC under Section 16(4) of the CGST Act, and that the credit allegedly reported in July 2018 GSTR-3B did not match the actual figures of that month.
• Aggrieved by the Impugned Order, the Petitioner filed the present writ petition under Articles 226 and 227 of the Constitution of India before the Hon’ble High Court of Karnataka.

Issue:

Whether the demand of excess ITC of Rs. 20,00,82,381/- raised solely on the ground of mismatch between ITC claimed in Form GSTR-3B and ITC reflected in Form GSTR-2A for FY 2018-19 is sustainable, when Form GSTR-2A by design did not capture details relating to import of goods, import of services and SEZ procurements during the said period?

Held:

The Hon’ble Karnataka High Court in Writ Petition No. 11918 of 2024 held as under:

• Observed that, Form GSTR-2A, as originally conceived and implemented, was designed to capture only details of supplies reported by domestic suppliers and did not encompass details relating to import of goods, import of services or SEZ procurements during FY 2018-19.
• Observed that, for the period April 2018 to March 2019, the Petitioner had duly disclosed reverse charge tax payments and corresponding credits in Form GSTR-3B, and such transactions were absent from GSTR-2A owing to the design limitations of the GST system itself, with the relevant credits also being duly reflected in Form GSTR-9 filed prior to October 31, 2020.
• Noted that, the alleged discrepancy arose merely on account of an erroneous disclosure of ITC pertaining to import of goods and SEZ procurements in GSTR-3B for September 2018 under Table 4(A)(5) (“All Other ITC”) instead of Table 4(A)(1) meant specifically for import of goods, which error was subsequently rectified in Form GSTR-9 through Table 6E.
• Noted that, as per GSTN Advisory dated August 29, 2020 and Press Release dated October 19, 2021, the details relating to imports and SEZ supplies began reflecting in Form GSTR-2A only from August 2020 pursuant to integration of the GST system with ICEGATE; ITC entitlement could not therefore be denied merely because of a typographical error in the Petitioner’s reply to the SCN, where “July” was inadvertently mentioned instead of “September”.
• Noted that, Rule 36(1)(d) of the CGST/KGST Rules, 2017 recognises the Bill of Entry as the statutory document for availing ITC on imported goods, and prior to the insertion of Section 16(2)(aa) of the CGST Act, 2017 with effect from January 01, 2022, there existed no statutory requirement of matching such credits with Form GSTR-2A.
• Held that, the reasoning and findings recorded by the Respondent in relation to Issue No. 2 pertaining to allegations of wrong availment and utilisation of excess ITC of Rs. 20,00,82,381/- on the ground of incorrect ITC claimed in GSTR-3B vis-à-vis GSTR-2A are erroneous and contrary to the material on record and the same deserve to be quashed.
• Directed that, the Impugned Order, to the extent it confirms demand of excess ITC of Rs. 20,00,82,381/- along with penalty of Rs. 20,08,238/- and the interest levied thereon, is set aside.
• Further held that, in respect of the remaining issues, namely, non-payment of GST on corporate guarantee, liability to pay tax on cross-charges received towards facilities and other expenses, ITC on promotion expenses held to be ineligible under Sections 16 and 17 of the CGST/KGST Act, denial of reduced rate of tax at 0.1% for merchant exports, wrong claim of refund on export computed on Invoice Value instead of Shipping Bill value, RCM liability on import of services, and ITC on Doctor consulting and patient counselling — the Impugned Order is erroneous and contrary to law and facts and has been passed without taking into account the relevant statutory provisions, Circulars, Notifications and judgments relied upon by the Petitioner.
• Hence, to afford the Petitioner one more opportunity of being heard, the matter was remanded back to the Respondent No. 3 – Adjudicating Authority for reconsideration afresh and in accordance with law as expeditiously as possible.

Our Comments:

The judgment of the Hon’ble Karnataka High Court is a significant reaffirmation of the well-settled position that an honest taxpayer cannot be penalised for genuine reporting errors and inherent design limitations of the GSTN system itself, particularly during the formative years of GST. The ruling brings much-needed relief to taxpayers engaged in import of goods, import of services and SEZ procurements for FY 2017-18 and FY 2018-19, who have been served with show cause notices alleging excess ITC merely on the ground of GSTR-2A vis-à-vis GSTR-3B mismatch.

Statutory framework — Section 16 of the CGST Act and Rule 36 of the CGST Rules

Section 16(2) of the CGST Act, 2017, as originally enacted, prescribed the following conditions for availment of ITC: (a) possession of a tax invoice, debit note or such other tax-paying document; (b) actual receipt of goods or services; (c) actual payment of tax to the Government; and (d) furnishing of the return under Section 39. The requirement that the details of the invoice or debit note must have been furnished by the supplier in the statement of outward supplies and communicated to the recipient was inserted as clause (aa) in Section 16(2) only by the Finance Act, 2021 with effect from January 01, 2022. Hence, for FY 2018-19, no statutory matching with GSTR-2A was required.

Further, Rule 36(1)(d) of the CGST Rules, 2017 identifies the Bill of Entry (or any similar document prescribed under the Customs Act, 1962 or rules made thereunder for assessment of integrated tax on imports) as the valid document for availment of ITC on imported goods. Hence, ITC entitlement on import of goods has always been independent of, and unaffected by, any reflection (or absence) in Form GSTR-2A.

Pari materia judgments

• The Hon’ble Supreme Court in Union of India v. Bharti Airtel Ltd. [(2022) 4 SCC 328] categorically held that Form GSTR-2A is “only a facilitator for taking an informed decision while doing self-assessment”, and that non-performance or non-operability of Form GSTR-2A would be of no avail because the registered person is statutorily obliged to submit returns on the basis of self-assessment in Form GSTR-3B. The judgment establishes that primary source documents (invoices, agreements, books of account) and not GSTR-2A, govern entitlement to ITC.
• The Hon’ble Calcutta High Court in Suncraft Energy Pvt. Ltd. v. Assistant Commissioner, State Tax, Ballygunge Charge [MAT 1218 of 2023 dated August 02, 2023] held that ITC cannot be denied to a bona fide purchaser solely on the ground of mismatch between Form GSTR-3B and Form GSTR-2A arising from default of the supplier, without first conducting inquiry against the defaulting supplier. The said judgment was upheld by the Hon’ble Supreme Court in Assistant Commissioner of State Tax v. Suncraft Energy Pvt. Ltd. [SLP (Civil) Diary No. 40417 of 2023 dated December 14, 2023].
• The Hon’ble Karnataka High Court in S. Marketing and Logistics (P) Ltd. v. Commercial Tax Officer [WRIT PETITION NO. 7295 OF 2024 (T-RES)] set aside an adjudication order disallowing ITC on the ground of GSTR-3B vis-à-vis GSTR-2A mismatch, holding that the adjudicating authority cannot mechanically reject ITC without following the procedure prescribed under Circular No. 183/15/2022-GST dated December 27, 2022.
• The Hon’ble Karnataka High Court in Abhimaani Structures and Engineering Pvt. Ltd. v. Superintendent of Central Tax [W.P. No. 35021 of 2025 (T-RES) order dated November 28, 2025] also set aside orders directing ITC reversal under Section 73(9) of the CGST Act for FY 2017-18 GSTR-3B vis-à-vis GSTR-2A discrepancies, on the ground that the Respondent failed to apply Circular No. 183/15/2022-GST.

Relevant CBIC Circulars

The CBIC, vide Circular No. 183/15/2022-GST dated December 27, 2022, issued a detailed clarification on the manner of dealing with the difference in ITC availed in Form GSTR-3B as compared to that detailed in Form GSTR-2A for FY 2017-18 and FY 2018-19. The Circular acknowledges that during these years, several bona fide errors and reporting limitations existed. It prescribes that where the difference exceeds Rs. 5 lakh in respect of a supplier, the taxpayer must produce a certificate from a Chartered Accountant or Cost Accountant certifying that the supplies were actually made and the tax has been paid; where the difference is up to Rs. 5 lakh, a declaration from the supplier suffices. The said Circular is binding on the field formations and applies to all proceedings (audit, scrutiny, investigation, adjudication, appeal) which are pending.

Subsequently, the CBIC issued Circular No. 193/05/2023-GST dated July 17, 2023, extending the benefit of Circular No. 183/15/2022-GST for the period from April 01, 2019 to December 31, 2021.

Key takeaways

• For FY 2017-18 and FY 2018-19, ITC cannot be denied merely on the basis of GSTR-3B vis-à-vis GSTR-2A mismatch, especially when the mismatch arises out of import transactions, SEZ procurements, or reverse charge transactions that were not captured in GSTR-2A by design of the GST system itself.
• ITC on import of goods is governed by Rule 36(1)(d) of the CGST Rules, with the Bill of Entry being the prescribed document. There is no requirement of matching with GSTR-2A prior to introduction of Section 16(2)(aa) of the CGST Act with effect from January 01, 2022.
• Bona fide reporting errors, such as classification of credits under the wrong table of Form GSTR-3B which are subsequently rectified in Form GSTR-9, cannot form the basis for denial of substantive ITC entitlement.
• Adjudicating authorities are bound to consider CBIC Circulars (particularly Circular No. 183/15/2022-GST), GSTN advisories, Press Releases, and binding judicial precedents before confirming demands on this ground. Mechanical adjudication ignoring these instruments is liable to be quashed.
• Taxpayers who have received SCNs or adverse orders on similar grounds may rely upon this judgment along with the Hon’ble Supreme Court ruling in Bharti Airtel and Suncraft Energy, the binding CBIC Circulars, and GSTN advisories, to defend their position before the Adjudicating Authority and Appellate forums.

The present judgment reinforces the principle that taxpayers cannot be made to suffer for the limitations of the GST system itself, and that procedural reporting errors, when rectified in good time, do not extinguish substantive ITC entitlement under Section 16 of the CGST Act, 2017.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

In this petition, petitioner seeks the following reliefs:

“i) To issue a Writ of Certiorari or any other appropriate writ or direction to quash the impugned order dated 22 February 2024 in Form GST DRC 07 with reference no. ZD290224053591F and No. DCCT (A)-4.7/DGSTO-4/BIO/2023-24 (Annexure A), passed by Ld. Respondent No.3 in confirmation of SCN dated 29 December 2023 issued in Form GST DRC 01 numbered as DC (Aud)-4.7/GST/DRC-01/BIO/2023-24 and ZD2912230915861 (Annexure H) passed by Ld. Respondent No. 3, being in violation of principles of natural justice, of consistency and against the provisions of law.

ii. To Issue order(s), direction(s), writ(s) or any other relief(s) as this Hon’ble Court deems fit and proper in the facts and circumstances of the case and in the interest of justice.

iii. To award cost of this petition

iv. Pass any other order or give any other direction as this Hon’ble Court deems fit and appropriate in the circumstances of the case.”

2. A perusal of the material on record will indicate that in pursuance of the audit observations, audit notices, audit proceedings and correspondence between the petitioner and the respondent for the Financial Year/Tax Period 2018-19, the respondent issued pre-intimation in Form GST DRC 01A dated 06.12.2023 calling upon the petitioner to pay a sum of Rs.1,15,15,27,040/- together with applicable interest under Section 73(5) of the CGST/KGST Act, 2017. The petitioner having submitted a reply dated 14.12.2023, the respondent issued a Show Cause Notice (SCN) dated 29.12.2023 under Section 73(1) of the CGST/KGST Act calling upon the petitioner to pay a sum of Rs.90,82,01,601/- together with interest and penalty. The petitioner submitted a detailed reply dated 29.01.2024 and attended personal hearing and filed written submissions pursuant to which the respondent proceeded to pass the impugned order dated 22.02.2024 under Section 73(9) of the CGST/KGST Act confirming the demand made in the SCN and calling upon the petitioner to pay a sum of Rs.30,37,84,642/- towards tax together with interest of Rs.29,14,02,162/- and penalty of Rs.3,03,78,464/- to the respondent. Aggrieved by the impugned order, the petitioner is before this Court by way of the present petition.

3. Heard learned Senior Counsel for the petitioner and learned HCGP for the respondents and perused the material on record.

4. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior Counsel for the petitioner invited my attention to the impugned order in order to contend that the reasoning and findings recorded by the respondent in relation to Issue No.2 pertaining to allegations of wrong availment and utilization of excess Input Tax Credit (ITC) of Rs.20,00,82,381/- due to incorrect ITC claimed in GSTR-3B vis-à-vis as available in GSTR-2A are erroneous and contrary to the material on record and the same deserve to be quashed. It was submitted on instructions that insofar as the remaining issues and findings recorded against the petitioner in the impugned order are concerned viz., non-payment of GST on corporate guarantee, liability to pay tax on cross-charges received towards facilities and other expenses, ITC with regard to promotion expenses held to be ineligible as per Sections 16 and 17 of the CGST/KGST Act, denial of reduced rate of tax at 0.1% for merchant exports, wrong claim of refund on export in Invoice Value instead of Shipping Bill resulting in excess refund, liability to pay under Reverse Charge Mechanism (RCM) for import of services and ITC with respect to Doctor consulting and patient counseling, which are alleged to be restricted under Section 17 of the CGST/KGST Act, the impugned order and the findings recorded by the respondent in this regard and to the said extent being erroneous and contrary to law and facts and without taking into account or consideration the relevant statutory provisions, Circulars, Notifications etc., and the judgments relied upon by the petitioner, the same deserve to be set aside and the matter remitted back to respondent No.3 – Adjudicating Authority for reconsideration afresh and in accordance with law.

5. Per contra, learned HCGP for the respondents would reiterate the various contentions urged in the statement of objections and submits that there is no merit in the petition and the same is liable to be dismissed.

6. I have given my anxious consideration to the rival submissions and perused the material on record.

7. A perusal of the material on record will indicate that as noticed above, the respondents have answered Issue No.2 relating to alleged wrong availment of utilization of excess ITC due to incorrect ITC claimed in GSTR – 3B vis-à-vis as available in GSTR-2A and thereby confirmed the demand of Rs.20,00,82,381/-together with interest and penalty and called upon the petitioner to pay a total sum of Rs.41,21,69,705/- in this regard by holding as under:

“2. ITC VERIFICATION.

Wrong availment and utilization of Excess Input tax credit of Rs.20,00,82,381/ due to the incorrect ITC CLAIMED In 3B VIS-A-VIS as available in GSTR-2A:

Audit’s detection: During the course of Audit on verification of the inward supply register, input tax claimed and availed details in GSTR-3B VIS-A-VIS GSTR-2A for the tax period April- 2018 to March-2019, some of the invoices are not reflecting in GSTR-2A, which resulted in excess availment of input tax credit This is not admissible under the provision of Section 16(2) of the Act and the details are as under:

–

The RTP is advised to pay the same.

Reply Filed:

• • Vide this Para, it is alleged that, Annexure 8 of the reply to DRC 01 A is not submitted to the office or uploaded in the common portal along with the reply in the Part-B DRC-01A. Accordingly, the contention of the RTP cannot be considered and the RTP is advised to pay the same. Hence, a demand of Rs.20,00,82,381/- is proposed along with interest of Rs.19,20,79,085/- and penalty of Rs.2,00,08,238/-

• • At the outset we would like to reiterate our submissions in the below paragraphs and also we are attaching

– Details of imports, procurements made from SEZ along with copies of Bill of Entry as Annexure – 13

– Copy of the notice and our reply to ASMT-10 as Annexure-14

• • We understand that your goodself has arrived at this observation by comparing the ITC as reported in GSTR 30 under Table 4(A)(5) with ITC as appearing in GSTR 2A.
  • The reconciliation of ITC values reported is as follows:

• • From the above table, it is evident that there is no excess ITC availed by the Noticee and the difference is merely due to wrong disclosure of ITC on import of goods and on procurements made from SEZ units in GSTR 3B.
  • The Assessee states that the ITC related to import of goods during July 2018 (Rs.7,73,73,105/-) and on goods procured from SEZ units during the financial year was wrongly reported in GSTR 3B under ‘All other ITC in Table 4(A)(5) instead of Table 4(A)(1). Towards this, the Noticee is enclosing the details of imports, procurements made from SEZ along with copies of Bill of Entry. Further, this error was corrected by us in the annual returns i.e., GSTR 9 filed for the relevant period by correctly reporting the input tax credit under ‘Import of goods (including supplies from SEZ)’ in Table 6E.

• • The Assessee submits that this issue was already picked up and verified by Assistant Commissioner of Commercial Taxes, LGSTO-25, by issuance of ASMT-10 dated 19.10.2023. We had submitted our reply vide ASMT-11 on 27.10.2023 and explained the reconciliation of the input tax credit. Basis our reply and submissions made, there were no proceedings initiated by the Ld. Officer. Copy of the notice and our reply are collectively enclosed as mentioned above for your ready reference.
  • Accordingly, we humbly submit that the errors are only related to reporting in returns but there is no excess availment of ITC. Also, as this issue was already verified by the jurisdictional officer, we submit that the demand is wrongly proposed and needs to be dropped.

Final Outcome:

The Noticee has claimed that they have wrongly reported in GSTR-3B of July-2018 relating to import of goods as all other ITC and this when checked with the GSTR-3B of Jul-2018, the all other ITC claimed in Jul-2018 3B is Rs.4304997/- and not Rs.7,73,73,105/. Hence, the claim of the Noticee can not be accepted. Further, input relating to procurements from SEZ units is claimed to have been shown in all other ITC in GSTR-3B. But have not mentioned in which GSTR-3B such claims have been made.

Here it is pertinent to note that, GSTR-9 is not a return for the purpose of availing input tax credit and any missed out input tax credit, has to be claimed as per Sec 16(4) within the permitted time, that is by October-20^th of 2019.

Any claim of input tax credit not put forth in the GSTR-3B return in the applicable columns cannot be claimed later in the GSTR-9 submitted on 30-12-2020.

Further, the Noticee has claimed in the specific box No.4A(1) of GSTR 3B an input tax credit relating to import of goods of Rs.66.88 Crores and now claiming the same by reporting through GSTR-9 is not as per law.

The Noticee claims that, the LGSTO has issued ASMT-10 regarding the same issue and the Noticee has replied and has ask the undersigned to drop the issue. But it can be observed that the Noticee has not submitted ASMT-12 as per Rule-99(3) of KGST rules, which is usually issued by the proper officer, if the reply submitted is acceptable. Hence, just because an ASMT-10 has been issued, the Act of belatedly claiming the input tax credit through GSTR-9 cannot be accepted. Hence based on the above discussion the Noticee is advised to pay back the wrongly claimed input tax credit along with the applicable interest and penalty. Which is computed as below:

You are advised to pay the above liability.”

8. A perusal of the aforesaid findings recorded by the respondents will clearly indicate that the same are contrary to the facts and law inasmuch as the respondents failed to consider and appreciate that GSTR-2A as it was conceived was designed to take in only details of suppliers in India and their supplies and it did not take in details relating to import of goods and services and SEZ procurements. The respondents also failed to consider and appreciate that for the period April, 2018 to March, 2019, petitioner entered the RCM payments for such procurements in GSTR-3B and during the said period, the above payments were not in GSTR-2A by design of the system itself and GSTR-3B returns were filed in September, 2018, which reflected most of the credits and credits were also mentioned in GSTR-09 in Table 6E filed before 31.10.2020; as per Central Government Advisory dated 29.08.2020 Import details and supplies from SEZ were getting reflected in GSTR-2A only from August, 2020 and as per Press Release dated 19.10.2021, the respondents clarified the position that GSTN as functionality to get details from ICE GATE and in view of introduction of Section 16(2)(aa) w.e.f., 01.01.2022, there was no requirement of matching with GSTR-2A.

9. The respondents also failed to consider and appreciate that the difference is due to wrong disclosure of ITC on import of goods and on procurement made from SEZ in GSTR-3B for the month of July (rectified as September) under “All other ITC” in Table 4(A)(5) instead of Table 4(A)(1), which is meant for import of goods and the error was rectified in GSTR-9 in Table 6E; further, as per Advisory dated 29.08.2020 and 19.10.2021 import details and supplies from SEZ are not reflected in GSTR-2A and ITC cannot be denied based on typographical error in reply to the SCN (mentioned as July instead of September); so also, as per Rule 36(1)(d) of the CGST/KGST Rules, Bill of Entry is the relevant document for availing ITC of Tax paid on import of goods and there is no requirement of matching with GSTR-2A as Section 16(2)(aa) is introduced w.e.f., 01.01.2022. Under these circumstances, I am of the considered opinion that that the reasoning and findings recorded by the respondent in relation to Issue No.2 pertaining to allegations of wrong availment and utilization of excess Input Tax Credit (ITC) of Rs.20,00,82,381/- due to incorrect ITC claimed in GSTR-3B vis-à-vis as available in GSTR-2A are erroneous and contrary to the material on record and the same deserve to be quashed.

10. Insofar as the impugned order containing the reasoning and findings on remaining issues recorded against the petitioner are concerned viz., non-payment of GST on corporate guarantee, liability to pay tax on cross-charges received towards facilities and other expenses, ITC with regard to promotion expenses held to be ineligible as per Sections 16 and 17 of the CGST/KGST Act, denial of reduced rate of tax at 0.1% for merchant exports, wrong claim of refund on export in Invoice Value instead of Shipping Bill resulting in excess refund, liability to pay under Reverse Charge Mechanism (RCM) for import of services and ITC with respect to Doctor consulting and patient counseling, which are alleged to be restricted under Section 17 of the CGST/KGST Act, I am of the view that the impugned order and the findings recorded by the respondent in this regard and to the said extent being erroneous and contrary to law and facts and without taking into account or consideration the relevant statutory provisions, Circulars, Notifications etc., and the judgments relied upon by the petitioner as well as its submissions/written submissions and consequently, in order to provide one more opportunity to the petitioner in this regard, the same deserve to be set aside and the matter remitted back to respondent No.3 – Adjudicating Authority for reconsideration afresh and in accordance with law.

11. In the result, I pass the following:

ORDER

i. The petition is hereby partly allowed.

ii. The Impugned Order-in-Original 4.7/DGSTO-4/BIO/2023-24 DCCT(A) dated 22.02.2024 enclosed at Annexure-A to the Writ Petition to the extent it has confirmed the demand of excess availment of ITC to the tune of Rs.20,00,82,381/- along with penalty of Rs.20,08,238/ and the interest levied thereon, on such ITC, is hereby set aside.

iii) The Impugned Order No.DCCT(A) 4.7/DGSTO- 4/BIO/2023-24 dated 22.02.2024 enclosed as Annexure-A to the Writ Petition to the extent it relates to the remaining following issues are set aside and remanded back to the Respondent No. 3, Deputy Commissioner of Commercial Taxes, Audit-4.7, Koramangala for reconsideration afresh in accordance with law as expeditiously as possible:

• • Non-payment of GST on Corporate Guarantee;
  • Liability to pay tax on cross charges received towards facilities and other expenses;
  • ITC with regard to promotion expenses held to be ineligible as per Section 16 and 17 of the Central Goods and Services Tax Act, 2017;
  • Denial of reduced rate of tax at 0.1% for merchant export;
  • Wrong claim of refund on export invoice value instead of shipping bill resulting in excess refund;
  • Liability to pay under RCM for import of services; and
  • ITC with respect to Doctor consulting and patient counseling, which are alleged to be restricted under Section 17 of the Central Goods and Services Tax Act, 2017.

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(Author can be reached at info@a2ztaxcorp.com)