The West Bengal Authority for Advance Ruling (WBAAR) has said that the retrospective insertion of Section 16(5) of the CGST Act does not allow taxpayers to reclaim Input Tax Credit (ITC) that had earlier been reversed under an earlier advance ruling.
The ruling has been issued in response to an application submitted by Eastern Coalfields Limited (ECL), a public sector undertaking engaged in the production and sale of coal. ECL asked whether it could reclaim GST ITC that had been reversed on invoices issued via its vendor, Gayatri Projects Limited, for services furnished during January, February, and March 2020.
Before that, ECL claimed ITC on invoices issued by Gayatri Projects Limited for a longwall mining project. Afterwards, the credit was reversed after an advance ruling issued in 2021, which affirmed that the company was not qualified for this credit because of not adhere to the norms regulating ITC availment.
The applicant contended that the retroactive inclusion of Section 16(5) via the Finance (No. 2) Act, 2024, with an effective date of July 1, 2017, lengthened the period for claiming Input Tax Credit (ITC) for certain financial years, thus granting them the right to recover previously reversed credit.
The claim has not been accepted by the authority. It said that Section 16(5) only overrides the time restrictions included in Section 16(4) for specific fiscal years and does not form a fresh right to reclaim ITC that was earlier reversed.
The authority observed that ECL had earlier submitted the pertinent returns within the stipulated durations and that the changes did not revise the other eligibility requirements u/s 16(2) of the CGST Act. The WBAAR additionally ruled that reclaiming ITC that had already been reversed would essentially constitute a refund of that credit.
The applicant couldn’t get back the reversed credit because Section 150 of the Finance (No. 2) Act, 2024 expressly prohibits refunds for tax paid or ITC reversed that shall not have been paid or reversed had the amendment existed before.
Also Read: How GST Software Handles Input Tax Credit (ITC) Tracking
The Authority ruled against ECL’s claim, stating that they could not reclaim the ITC reversed in the earlier advance ruling.
| Name of the Applicant | Eastern Coalfields Ltd. |
| GSTN No. | 19AAACE7590E1ZI |
| Case No. | WBAAR 26 of 2025-26 |
| Applicant’s representative heard | Mr Rajeev Kumar Agarwal |
| West Bengal AAR | Read Order |
