AP AAR Allows Total GST Credit Charged on the Invoice by the Distributor

Full credit of the GST charge would comprise inside the tax invoice through the supplier despite future commercial or financial credit notes would get issued, Andhra Pradesh Authority of Advance Ruling (AAR) stated.

There would be no need for the petitioner to reverse the proportionately of ITC to the extent of the fiscal or commercial credit note provided via the supplier, The bench of K. Ravi Sankar and R. V. Pradhamesh Bhanu observed.

The petitioner would be in the business of providing different electronic things. The petitioner brought different electronic items via the supplier. The supplier provides the tax invoice and levies GST on the value of tax. The petitioner furnished that the supplier paid GST filed GSTR 3B and gives the information of the suppliers in GSTR 1. According to the tax invoice for the obtained goods through the supplier, the petitioner would have obtained the goods and incurred the payment of considerations.

An advance ruling is been sought by the petitioner on the problem of whether the petitioner would be duly qualified for availing the credit of the GST levy on the tax invoice provided via the supplier and if the GST was paid through the supplier to the government despite a later commercial or fiscal credit note would be issued for the invoice portion.

An additional problem would have been raised if the petitioner would be needed to reverse the Input tax credit proportionally to the extent of the financial or commercial credit note provided through the supplier.

The financial credit note will not get utilised as a conduit to transfer the ITC in a bogus way through raising the invoice for the higher value to transfer the ITC and after that diminishing the value of transactions via the financial credit note while the ITC transferred would leave unchanged, AAR noticed. For the matter, the misusage of the financial credit note would be witnessed on any attribute, and penalties would get levied under Section 132(b) for the same.

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There is no discount for the supply value through the way of issuance of the credit notes excluding the cases in which the provisions comprises in clause (b) of subsection (3) of Section 15 would fulfil, AAR ruled.