The Goods and Services Tax Appellate Tribunal (GSTAT), Mumbai, has held that eligible input tax credit of IGST paid on imported goods cannot be denied merely because it was reported under the wrong heading in GSTR-3B, where the credit is supported by bills of entry and reflected in GSTR-2A.
The bench of Atul Madhukar Kurhekar (Judicial Member) and J. Michael Kennedy (Technical Member) quashed a demand of ₹10,81,339 comprising tax, interest and penalty. It also held that an appeal filed within the special amnesty window under Notification No. 53/2023-Central Tax could not be treated as time-barred merely because the full pre-deposit had been paid through the Electronic Credit Ledger instead of partly through the Electronic Cash Ledger.
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The assessee is the proprietor of Sea Link Enterprises, engaged in importing and trading goods. During financial year 2018-19, the taxpayer availed ITC of ₹6,36,082 representing IGST paid on imports covered by three bills of entry filed at the Mumbai Custom House.
The credit comprised ₹1,98,384 for May 2018, ₹1,67,035 for June 2018 and ₹2,70,663 for October 2018.
The department issued scrutiny and demand notices alleging that excess ITC claimed in GSTR-3B or GSTR-9 was not confirmed in GSTR-2A or Table 8A of GSTR-9. The taxpayer did not respond to the notices.
An ex parte adjudication order under Section 73(9), dated August 30, 2022 and digitally signed on September 1, 2022, confirmed the following demand:
| Component | Amount |
| IGST | ₹6,36,082 |
| Interest under Section 50 | ₹3,81,649 |
| Penalty under Section 122(2) | ₹63,608 |
| Total | ₹10,81,339 |
The adjudicating authority reasoned that the supplier had neither paid tax nor disclosed the supply in GSTR-1, rendering the credit inadmissible.
The taxpayer filed his first appeal on January 30, 2024 under Notification No. 53/2023-Central Tax dated November 2, 2023.
The notification provided a special appeal window up to January 31, 2024 for eligible taxpayers challenging orders under Sections 73 or 74 passed on or before March 31, 2023.
It required a pre-deposit of 12.5% of the disputed tax, with at least 20% of that deposit payable through the Electronic Cash Ledger.
Although the taxpayer deposited the full required quantum, he paid it entirely through the Electronic Credit Ledger. The first appellate authority rejected the appeal on March 4, 2025 for failure to pay the stipulated cash component. Its order also described the appeal as time-barred.
The department defended this approach before GSTAT, arguing that the notification’s conditions had not been fulfilled.
The Tribunal distinguished the notification’s filing deadline from its requirements governing the quantum and mode of pre-deposit.
It found that the appeal had been filed on January 30, 2024, within the special window, and that the entire required quantum had been deposited before filing. The defect concerned the ledger used for part of the payment.
According to GSTAT, the notification did not provide that payment through the wrong ledger would automatically render an otherwise timely appeal time-barred.
The Tribunal observed that the amnesty notification was intended to enable appeals that had become barred under the ordinary limitation provisions. Applying those ordinary deadlines to reject an appeal filed within the special window overlooked the purpose of the notification.
It also held that a reasonable opportunity should be afforded to cure a deposit deficiency before rejecting an appeal. The Bench referred to the Kerala High Court’s decision in Alis Super Market, concerning a curable deficiency under the same notification.
GSTAT further held that the taxpayer need not make an additional cash deposit of ₹15,902 towards the first appeal at this stage.
The Tribunal reasoned that the full 12.5% quantum had already been deposited. Requiring a further payment without adjustment would increase the deposit beyond the percentage prescribed by the notification.
It also noted that the taxpayer had paid ₹63,608 in cash at the Tribunal appeal stage under Section 112(8). While acknowledging that the deposits related to different appellate stages, the Bench considered the revenue’s interest adequately secured.
The Tribunal consequently held the credit-ledger deposit sufficient for maintaining this first appeal. This conclusion rested on the circumstances and payment history before it; the order expressly recognised the notification’s cash-component requirement.
On the substantive ITC dispute, the Tribunal found that the adjudicating authority had applied domestic supplier-related reasoning to imported goods.
IGST on imports had been paid by the importer directly to the Government at customs clearance. There was no domestic supplier required to report these imports in GSTR-1.
The Bench noted that Rule 36(1)(d) of the CGST Rules recognises a bill of entry as a document supporting availment of ITC.
It also rejected reliance on Section 16(2)(aa), pointing out that the provision came into force on January 1, 2022 and did not apply to the disputed financial year 2018-19.
The taxpayer explained that import IGST for May and October 2018 had been reported in row 4(A)(5), covering “All other ITC”, instead of row 4(A)(1), covering “Import of goods”, in GSTR-3B.
For June 2018, the credit had been reported under the correct heading.
The Tribunal explained that Table 8A of GSTR-9 captures domestic supplier-related inward supply data, whereas import IGST is separately reported in Tables 6E and 8G–8I.
Comparing import credit with a table that excludes imports therefore created a misleading appearance of excess credit.
The Bench held that incorrect reporting affected the classification of credit in the return. It did not convert otherwise eligible import credit into ineligible credit.
After examining the three bills of entry and corresponding GSTR-2A extracts, GSTAT found that the relevant particulars and IGST amounts matched.
| Return period | Bill of entry | IGST matching GSTR-2A |
| May 2018 | 6312408 dated May 9, 2018 | ₹1,98,384 |
| June 2018 | 6882117 dated June 20, 2018 | ₹1,67,035 |
| October 2018 | 8332948 dated October 5, 2018 | ₹2,70,663 |
| Total | ₹6,36,082 |
The Tribunal found that the entire disputed credit appeared in the import section of GSTR-2A. The department’s finding that it was not confirmed in GSTR-2A was therefore contrary to the record.
It specifically noted that June 2018 credit of ₹1,67,035 had been reported correctly and disclosed no mismatch even under the department’s comparison method.
The Bench also examined customs duty components and clearance records and concluded that the IGST had actually reached the Government.
The Tribunal decided the merits itself under Section 113(1), observing that remand would add another round of litigation over an order passed in 2022 despite the narrow issue and available documentary evidence.
It set aside both the first appellate order and the original adjudication order, allowing ITC of ₹6,36,082.
With the tax demand failing, the consequential interest of ₹3,81,649 and penalty of ₹63,608 also fell. The entire demand of ₹10,81,339 was accordingly quashed.
Recovery proceedings arising from the demand, if initiated, stood withdrawn. The Tribunal directed refund of pre-deposits made at both appellate stages, as admissible under Section 115 after due verification. No costs were imposed.
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