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The Applicant, a manufacturer and supplier of plastic and rubber toys had sought an Advance Ruling before the Gujarat AAR to ascertain the appropriate classification, GST Rate of the toys supplied and whether ITC can be claimed in relation to CGST and SGST separately in debit notes issued in current F.Y. towards the transactions for the period 2018-19?
It was submitted by the Applicant in terms of Notification No. 01/2017 – Central Tax Rate dated 28.06.2017, as amended, toys which are other than electronic toys, are classifiable under CTH 95030030, chargeable to 12% GST.
The Applicant further submitted that basis the amendment to sec 16(4) of the CGST Act, the condition of invoice to debit note correlation has been removed i.e., the language using the words ‘invoice relating to such’ before the words ‘debit note pertains’ have been omitted.
The AAR observed that as the toys manufactured by the Applicant were not electronic, they were appropriately classifiable under CTH 95030030, chargeable to 12% GST. As for the question relating to claiming of ITC in respect of debit notes for transactions of F.Y. 2018-19, it was observed that the amendment to sec 16(4) of the CGST Act does not have far reaching effect in the said matter and the debit note is always connected to the invoice even if it is issued in relation to change in value of an invoice.
The debit note does not gain independent existence on omission of the words ‘invoice relating to such’ from the words ‘invoice relating to such debit note pertains’. Further, referring to an e-flyer issued by the CBIC, it was observed that the serial no. and date of corresponding tax invoice is required to be mentioned in the debit note. This indirectly co-relates the actual invoice with the debit note issued.
Basis the above observations, the AAR held that Applicant cannot claim ITC in relation to CGST and SGST separately in debit notes issued in current F.Y., towards the transactions for the period 2018-19.
I-tech Plast India Private Limited [Advance Ruling No. GUJ/GAAR/R/10/2021]
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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