ITC Can’t Be Availed On Tax paid Against Customs Pre-Notice Consultation: AAR

The Gujarat Authority of Advance Ruling (AAR) has held that Input Tax Credit (ITC) cannot be availed against the pre-notice consultation letter under Section 28(1) of the Customs Act, 1962 in terms of the time line prescribed in Section 16(4) of the CGST Act, 2017. The bench of Vishal Malani and Sushma has observed that ICES do not have any functionality for payment of Customs duties on a Bill of Entry after giving Out-of-Charge (OOC) to the goods, except in the case of provisional assessments. Any duty to be paid subsequent to the OOC is to be paid through a TR-6 challan. This TR-6 challan is not a prescribed document for the purpose of availing ITC by a registered person. The only recourse, therefore, available in such cases is to approach the Customs Authorities for re-assessment of the Bill of Entry, which would then transmit the same electronically to GSTN and subsequently get reflected in the applicant's GSTR 2B. The applicant paid the differential duty along with applicable interest through challan. Consequent to the payment, they also got a closure letter from the Assistant Commissioner of Customs, Appraising Group-V (Port), Custom House, Kolkata stating that since they have paid the differential amount, along with applicable interest, no further action is required to be taken in this regard. The applicant sought the advance ruling on the issue whether the applicant is able to avail the Input Tax Credit of Rs. 27,14,559 Integrated Tax paid against the pre-notice consultation letter under Section 28(1) of the Customs Act, 1962 in terms of the time line prescribed in Section 16(4) of the CGST Act, 2017. The applicant contended that they are eligible to avail ITC of IGST, as a part of the differential IGST for imports made during the relevant period, in terms of the timeline prescribed under Section 16(4) of the CGST Act, 2017. As per Rule 36(1)(d) of the CGST Rules, 2017, 'a bill of entry or any similar documents prescribed under the Customs Act, 1962 for the self-assessment of integrated tax on imports' has been prescribed as a valid document for the purpose of claiming ITC. The applicant stated that the documents evidencing payment can be considered as a valid duty paying document for the purpose of availing ITC and accordingly, it is evident from Rule 9(1)(b) (sic) that ITC is eligible on the basis of challan evidencing payment of additional amount of additional duty, on the basis of which it can be proved that the duty has been paid by the tax payer. the applicant has made the payment of the differential IGST, on the basis of self-assessment by the Customs authorities, along with appropriate interest. Therefore, the ITC of the IGST paid as a part of differential customs duty should be available to the tax payer. Since the imports are made in the Financial Year 2022-23 and the pre- notice consultation letter under Section 28(1) of the Customs Act, 1962 is received on 05-04-2024, i.e. in Financial Year 2024-25, and the payment of IGST is made on 10-05-2024, the time limit to avail the ITC of that shall be as if the invoice is received in F.Y. 2024-25. The applicant stated that the pre-notice consultation letter against the Bill of Entry shall be considered as any other document specified in Rule 36(1)(d). The Customs Authorities on the submission of challan and working appropriated the payment towards the Customs dues which itself substantiates that those documents are accepted under the Customs law by the authorities. Hence, the same should be acceptable by the GST authorities. The AAR noted that ITC cannot be availed on the basis of a pre-consultation letter or a duty paying documents such a TR-6 challan. The AAR held that neither a TR-6 challan as such, nor a TR-6 challan read with the SVB order and letters issued by the tax authorities, can be considered as an eligible document for the purpose of availment of ITC. Ruling Details Applicant’s Name: Hansaben Jayantibhai Patel Ruling Date: 24/11/2025 Click Here To Read Ruling Read More: CBDT Elevates Five Senior IRS Officers to Chief Commissioner Rank for 2025 Panel Year

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