Punjab Vimal Alloys (P.) Ltd., Advance Rulings Authority, In re- [2023]
The applicant was operating a furnace and acquiring ferrous alloys, scrap, natural gas, and other resources. It requested an advance ruling to ascertain whether it may claim ITC on purchases made from a seller who had discharged tax liability on the same transaction, but the predecessor seller had not.
The Authority for Advance Ruling observed that, under Section 16(2)(c) of the CGST Act, 2017, the taxes levied on the impugned supply must be actually paid to the government, either in cash or via the utilization allowable ITC, in order to be eligible for ITC. If the seller or former seller fails to discharge Tax on such supply, the ITC cannot be utilized or claimed. As a result, it was determined that if the seller or any predecessor seller failed to discharge GST on the contested supply, the applicant would be ineligible to claim ITC on such supply.
