Facts-A company challenged a ?5.76 lakh GST demand. The court sided with the company on a ?1.5 lakh ocean freight charge, citing a recent Supreme Court decision. However, the remaining ?4.25 lakh demand for missing invoice copies and GSTR-2A discrepancies wasn't decided. The company can appeal and obtain supplier verification to potentially claim the disputed ITC.

Background

The company received a demand order from the GST department for Rs. 5,75,864. This included:

• Rs. 1,50,402 for IGST on ocean freight (later found to be incorrect)
• Rs. 4,25,456 for wrongly availed input tax credit (ITC) on five invoices (missing clear copies) and three invoices (not reflected in GSTR-2A)

Arguments

• Ocean Freight: The company relied on a Supreme Court decision (Mohit Minerals case) to argue that ocean freight is not a separate taxable supply under GST. The department conceded this point.
• Input Tax Credit: The company argued that the missing clear copies of invoices shouldn't disqualify them from claiming ITC. They also claimed the invoices were reflected in their GSTR-3B (purchase return) but not necessarily in GSTR-2A (sales return from suppliers).

Court's Decision

• The court agreed with the company regarding the ocean freight, quashing that demand (Rs. 1,50,402).
• The court didn't rule on the ITC demand (Rs. 4,25,456) but allowed the company to file a statutory appeal with the authorities. The company can:
  • Obtain supplier certificates confirming the transactions.
  • Request supplier certificates from their assessing officers.

GST Case law-Shri Narayan Corporation, Rep by its Managing Partner S. Arunraj Versus Union of India, The Superintendent (Audit)

Citation-2024 TAXONATION 1120 (MADRAS)

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