The Hon’ble Kerala Authority for Advance Ruling (“the AAR”) upheld that the Input Tax credit (“ITC”) cannot be claimed by Applicant with respect to GST pertaining to a period prior to vendor’s effective date of registration. The AAR also observed that mere reflection of invoice in Applicant’s GSTR-2A is not sufficient for claiming ITC and the same is eligible only on fulfilment of statutory conditions prescribed under the CGST Act, 2017 (“the Act”) and CGST Rules, 2017 (“the Rules”).
The said ruling was given in the case of Opsin Healthcare Private Limited1.
Facts of the case
- M/s Opsin Healthcare Pvt. Ltd. (“the Applicant”) was operating hospitals at Pandalam and Mavelikkara locations.
- The Mavelikkara unit of the Applicant functioned in a rented premises. The landlord obtained GST registration with effect from June 15, 2022. Post which, he issued two tax invoices dated June 30, 2022 pertaining to the prior period Apr’21 to Mar’22, and Apr’22 to Jun’22, respectively.
- These invoices were marked as B2C (Business to Customer) by the landlord and didn’t contain the GST Identification Number (“GSTIN”) of hospital.
- However, the invoices appeared as B2B (Business to Business) in GSTR-2A of the Applicant.
- The Applicant sought an advance ruling on the eligibility of ITC pertaining to the two invoices raised by the landlord, and any future audit query on the same.
- The Applicant didn’t submit any contentions on the issues and merely sought an advance ruling basis the facts provided.
Jurisdictional Officer’s Comments
- Whether ITC can be claimed on the GST charged by the landlord pertaining to period before the effective date of registration?
- Whether ITC can be claimed on the GST charged by the landlord pertaining to period before the effective date of registration?
- As per section 31(2) of the Act and Rule 47 of the Rules, a registered person supplying taxable services must issue a tax invoice within 30 days from the date of supply. Further, pursuant to section 16(2)(a) of the Act, possession of a tax invoice issued by a registered person is required for the purpose of claiming ITC.
- Considering that the landlord was unregistered until the effective date of June 15, 2022, and the 30-day permissible time limit for issuing invoices was not met, both the tax invoices to the extent covering the period prior to this effective date, shall be invalid.
- Moreover, as per section 31(2) of the Act, a newly registered person can issue revised tax invoices in respect of supplies made post the effective date of registration and before issue of certificate. However, this is not applicable in present case considering that the supplies pertain to period prior to the effective date of registration.
- Accordingly, the AAR concluded that the ITC pertaining to the entire first invoice (period Apr-21 to Mar-22) and proportionate second invoice (Apr-22 to May-22) shall be ineligible for the Applicant.
- With respect to rent pertaining to June 2022, as the landlord was registered during this period & also issued the invoice within prescribed time limit, the proportionate ITC in the second invoice pertaining to June 2022 can be availed either by November 30, 2023 or before furnishing of the annual return of FY 2022-23, whichever is earlier, pursuant to section 16(4) of the Act.
- Further, the AAR reiterated that the auto-population of the invoice in GSTR-2A is only facilitative mechanism and does not validate the claiming of ITC. The ITC is eligible only on the fulfilment of the statutory conditions as per the Act and the Rules.
- Whether the availment of ITC will trigger further audit query from the department?
- The AAR contended that, the issue pertaining to audit and departmental scrutiny does not fall within the jurisdictional ambit of an advance ruling, as it is not related to tax liability, classification, valuation, admissibility of ITC, or any other matter mentioned in section 97(2) of the Act.
- Hence, the AAR refrained from making any observation in this matter as it is an administrative issue governed under the Chapter XVI of the Act.
Conclusion
The AAR concluded that the ITC attributable to the period preceding the vendor’s effective date of registration is not admissible. It additionally clarified that the mere appearance of an invoice in the Applicant’s GSTR-2A does not validate ITC eligibility, since GSTR-2A is intended solely for reconciliation and the admissibility of credit must be evaluated in light of all relevant statutory provisions under the Act and the Rules.
The AAR further stated that administrative matters lie beyond the scope of an advance ruling and should be taken up separately with the appropriate authority.
Source
1 [TS-968-AAR(KER)-2025-GST]
