Innominds Wins Appeal Against ₹68.5-Lakh GST Demand As Tribunal Holds GSTR-2A-Reflected IGST Claimed Under CGST/SGST Was Not Wrongly Availed

The Appellant challenged the First Appellate Authority’s confirmation of a demand of ₹68,52,254 under Section 73 of the CGST Act for alleged excess availment of input tax credit (ITC), based on a mismatch between its returns and Form GSTR-2A.

The demand related to two invoices dated 30 March 2018 issued by an SEZ unit. The supplier charged and reported IGST, which appeared in the Appellant’s GSTR-2A, but the Appellant claimed the credit equally under CGST and SGST instead of IGST.

The original adjudicating authority had dropped other proposed demand heads and confirmed only this amount; the First Appellate Authority upheld it, principally for want of certificates contemplated by Circular No. 183/15/2022-GST.

The Tribunal heard the appeal under Section 112 of the CGST Act.

Section 16(2) of the CGST Act sets out the applicable conditions for ITC, including possession of the prescribed tax document, receipt of the supply, payment of the tax charged to the Government, and filing of the return; Section 155 places the burden of proving ITC eligibility on the claimant.

Section 73 permits demand where ITC has been wrongly availed or utilised, while Section 7(5)(b) of the IGST Act treats supplies to or by an SEZ unit as inter-State supplies.

Circular No. 183/15/2022-GST prescribes an invoice-verification process, including supplier or accountant certificates in specified mismatch cases; the Tribunal held that those certificates are verification tools, not additional statutory conditions for ITC.

The Tribunal applied Rejimon Padickapparambil Alex v. Union of India, which treated credit reported under the wrong tax head, where IGST was otherwise charged and reflected, as a technical reporting error rather than excess credit.

The Tribunal found that the Appellant held the invoices, received the services, filed its returns, paid the suppliers the consideration inclusive of tax, and showed the IGST charged on the invoices in GSTR-2A; the Department produced no evidence that the supplier had failed to pay that tax.

It concluded that the Appellant had discharged its burden under Section 155 and that a GSTR-2A mismatch, without more, did not establish failure to satisfy Section 16(2)(c).

Because the invoices were issued by an SEZ unit, the supplies were inter-State and IGST was chargeable; the error lay in the head under which the credit was reported, not in claiming credit for tax that was not charged or paid.

Further, the authorities had not followed the Circular’s initial step of seeking invoice details and verifying the statutory conditions. In any event, the absence of a certificate could prompt verification, but did not itself justify denial of credit.

The Tribunal therefore held the credit was not wrongly availed under Section 73.

It set aside the impugned appellate order, allowed the appeal with consequential relief, and held that the associated interest and penalty did not survive.

It also stated that the statutory interest on refund of the pre-deposit was payable under Section 115.