The Hyderabad Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) has set aside a GST demand of ₹68.52 lakh after holding that claiming IGST credit under CGST and SGST instead of IGST amounts to a reporting error and not wrongful availment of Input Tax Credit (ITC).
The Bench comprising Judicial Member A.P. Ravi and Technical Member Duvvuri Krishna Srinivas held that the inadvertent error in the tax head under which credit was claimed does not make the credit ineligible under Section 73 of the GST Act.
The Tribunal observed: “We are of the considered opinion that the credit of ₹68,52,254/- equally availed under CGST and SGST on the two invoices is not input tax credit wrongly availed within the meaning of Section 73, the inadvertent error in the head of credit being an error of reporting and not an availment of credit to which the Appellant was not entitled.”
The case concerned Innominds Software Private Limited, which had claimed ITC under CGST and SGST on two invoices issued by Innominds Software SEZ India Private Limited. However, the IGST on these invoices was reflected in Form GSTR-2A.
The GST Department treated the difference as excess availment of ITC and confirmed a demand of ₹68.52 lakh. The First Appellate Authority upheld the demand solely because the company had failed to produce the certificates contemplated under a 2022 CBIC circular.
The company challenged the demand before the GSTAT, arguing that it had only claimed eligible credit under the wrong tax heads. The Tribunal found that the services and invoices were undisputed and there was no evidence that the supplier had failed to pay IGST. It held that the mismatch warranted verification, not automatic denial of credit.
Relying on a Kerala High Court ruling, it set aside the demand, interest and penalty
For Appellant: CA Sudhir V.S.
For Revenue: Srinivasulu and Shri Narender Reddy