GSTAT Upholds ₹3.80 Lakh Interest on ITC for Non-Payment to Suppliers Within 180 Days

GSTAT Pune Bench upholds the demand of ₹31,115 towards ITC (IGST) and interest of ₹3,80,408 on ITC relating to supplies for which payment was not made to suppliers within 180 days during FY 2018–19. The Tribunal holds that the taxpayer failed to discharge the burden under Section 155 of the CGST Act to establish ITC eligibility, as it did not produce invoices, proof of payment, evidence of receipt of goods or other supporting documents. It further clarifies that the non-operation of FORM GSTR-2 does not extinguish the liability to reverse ITC and pay interest under the second proviso to Section 16(2) read with Rule 37, as applicable during the relevant period, subsequent payment to suppliers or financial hardship cannot extend the statutory 180-day period. The penalty of ₹20,000 u/s 73(9) read with Section 20 of the IGST Act is also upheld. Thereby, directs the Proper Officer to quantify the interest on the ITC demand and adjust the pre-deposit as well as the amount already paid through DRC-03 against the outstanding demand. 

Indermal GSTAT Pune.pdf