In re Aristo Bullion Pvt. Ltd (GST AAAR Gujarat)
Utilization of ITC cannot be denied merely on the ground that the inputs have no nexus with outward supply
The AAAR, Gujarat in the matter of M/S. Aristo Bullion Private Limited [Advance Ruling No. GUJ/GAAAR/APPEAL/2021/36 dated December 22, 2021] modified the ruling passed by the AAR, and held that, the assessee is entitled to use the Input Tax Credit (ITC) balance lying in its Electronic Credit Ledger (ECL), legitimately earned on the on Gold & Silver Dore Bars etc., for the purpose of paying GST on outward supply on Castor Oil Seeds, and it cannot be denied merely on the ground that the inputs have no nexus with outward supply.
Facts:
M/S Aristo Bullion Private Limited (“the Appellant”) is a company engaged in the business of manufacturing and importing Gold and Silver Bullion including coins etc. These raw materials were procured domestically or imported as raw materials after paying appropriate Goods and Services Tax (“GST”). The Appellant intended to pay GST by utilising the amount of Input Tax Credit lying in the ECL.
Further, the Appellant is also engaged in the trading of the Castor Oil Seeds and intended to pay GST by utilising the ITC lying on the ECL taken on inward supply of Gold & Silver Dore / articles, for the payment of outward supply of Castor Oil Seeds.
This appeal has been filed against the order passed by the AAR, Gujarat in Advance Ruling No. GUJ/GAAR/R/15/2021, dated January 27, 2021 , wherein it was held that, ITC balance available in the ECL legitimately earned on the inputs/raw-materials/inward supplies meant for outward supply of Bullions, cannot be used towards the GST liability on ‘Castor Oil Seed’ procured from agriculturists and subsequently meant for onward supply, as there is no nexus/connection between the inputs and final product since the inputs are not used or intended to be used in the course or furtherance of the business of supply of ‘Castor Oil Seeds.
Issue:
Whether ITC validly taken on any ‘input’ can be utilized for payment of ‘output tax’ i.e. GST on any outward supply which has no nexus with the inputs on which ITC was taken.
Held:
The AAAR in Advance Ruling No. GUJ/GAAAR/APPEAL/2021/36 dated December 22, 2021 held as under:
