Circular, 2025

Text

Reproduced from the document India Code holds for this instrument. The Gazette prints Hindi and English side by side and this is the English; the Department's own PDF remains the authority.

Civedan No- QYS0Y] Office of the Commissioner, State Tax, Uttar Pradesh (GST Section) Letter No. GST/2024-25/ (0] /State Tax Lucknow: Dated: 16y of ° 2025 To, All Zonal Additional Commissioner, Additional Commissioner Grade -2 (S.1.B.) State Tax, Uttar Pradesh.

-section Subject: Clarifying the issues regarding implementation of provisions of sub. and sub-section (6) in section 16 of UPGST Act, 2017-reg.

Reference is invited to sub-section (5) and sub-section (6) of section 16 of the Uttar Pradesh Goods & Services Tax Act, 2017 (hereinafter referred to as the “UPGST Act”) inserted in section 16 of the UPGST Act, with cffect from the 1st day of July, 2017, vide section 6 of The Uttar Pradesh Goods And Services Tax (Second Amendment) Act, 2024, whereby the time limit to avail input tax credit under provisions of sub-section (4) of section 16 of UPGST Act has been retrospectively extended in certain specified cases. 1.2 Sub-section (4), sub-section (5) and sub-section (6) of section 16 of the UPGST Act are reproduced below for ready reference:

“(4)4 registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both afier the thirtieth day of November following the end of financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier.

Provided that the registered person shall be entitled to take input tax credit afier the due date of furnishing of the return under section 39 for the month of September; 2018 till the due l/fl"" of Jurnishing of the return under the said section {J”e’bif';;’;:;:i z/;M‘I"‘Chr 20/5 in "j’i[’evcl of any invoice or invoice relating to such 017518, the a’e’::i I}; ‘;ffg:‘; : 5"":’ ;::W:ES or both made during the financial year g cen uploaded by the supplier under sub secti secti il e ion () of SfC/lon 37 till the due dgqe Jor furnishing the details under sub- section (1) of said section for the mont), of March, 2019, Page 1ofy

(5) Notwithstanding anything contained in sub-section (4), in respect of an invoice or debit note for supply of goods or services or hoth pertaining 1o the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is Siled upto the thirticth day of November, 2021 . sec 2

(6) Where registration of a registered person is cancelled under section 29 and woked by any order, either under subsequently the cancellation of registration is r section 30 or pursuant to any order made by the Appellate Authority or the Appellate Tribunal or court and where availment of input tax credit in respect of an invoice or debit note was not restricted under sub-section (4) on the date of order of cancellation of registration, the said person shall he entitled 1o take the input tax credit in respect of such invoice or debit note for supply of goods or services or both, in a return under section 39,—

(i) filed upto thirtieth day of November following the financial year to which such invoice or debit note pertains or furnishing of the relevant annual return, whichever is earlier; or

(ii) for the period from the date of cancellation of registration or the effective date of cancellation of registration, as the case may be, till the date of order of revocation of cancellation of registration, where such return is filed within thi rey days from the date of order of revocation of cancellation of registre whichever is later.” 13 Further, it has been provided in section 36 of The Uttar Pradesh Goods And Serv ices Tax (Second Amendment) Act, 2024 (reproduced below), that no refund of any tax paid or the input tax credit reversed shall be granted on account of the said retrospective insertion of sub-section (5) and sub-section (6) of section 16 of the UPGST Act. “36. No refund shall be made of all the tax paid or the input tax credir reversed, which would not have been so paid, or not reversed, had section 6 of this Amendment Act been in Jorce at all material times.” 1.4 Besides, vide Notification No.-1665/X1-2-24-9(47)/17-T.C.272-U.P. Act-1-2017- Order-(335)-2024 dated 08.01.2025, a special procedure for rectification of orders has been notified under section 148 of the UPGST Act, to be followed by the class of taxable persons, against whom orders under scction 73 Or section 74 or section 107 or section 108 of the UPGST Act have been issued confirming demand for wrong availment of input tax credit on account of contravention of provisions of sub-section (4) of section 16 of the UPGST Act. but where such input tax credit is now available as per the provisions of sub-scction (5) or sub-scction (6) of scction 16 of the UPGST Act, and where appeal against the said order has not been filed. ’ ll.S‘ R.cprclsentanons have 'bccnl received from trade and industry requesting for clarification in respect of various Issues Pertaining to availment of benelit of the said Page or7 amendments in section 16 of UPGST Act to the taxpayers against whom demands have been issucd alleging wrong, availment ol input tax credit in contravention of provisions of sub- section (4) of section 16 of UPGST Act, who are now entitled to avail the said input tax credit as per the retrospectively inserted provisions of sub-scction (5) or sub-scction (6) of scction 16 of the UPGST Act.

2. In order to ensure uniformity in the implementation of the provisions of law across the field formations, the Commissioner, in exercise of its powers conferred by scction 168 of the UPGST Act, hereby clarifies the issues as below,

3. The following action may be taken by the tax authorities and/ or the taxpayers in various scenarios for availment of benefit on account of retrospectively inserted provisions of sub-section (5) or sub-section (6) of section 16 of the UPGST Act: 3.1 Where no demand notice/statement has been issued under section 73 or section 74 of the UPGST Act:

In cases, where any investigation/proceedings in respect of wrong availment of input tax credit alleging contravention of provisions of sub-scction (4) of scction 16 of the UPGST Act has been initiated, but no demand notice/statement under scction 73 or section 74 of the said Act has been issued, and taxpayers are now entitled to avail the said input tax credit under the provisions of sub-section (5) or sub-scction (6) of scction 16 of the UPGST Act, the proper office shall take cognizance of the sub-section (5) or sub-section

(6) of section 16 of UPGST Act, inserted retrospectively with effect from 01.07.2017 and take further appropriate action. This also includes the cases where an intimation in FORM DRC-01A has been issucd under rule 142(1A) of the UPGST Rules for denial of input tax credit on account of contravention of sub-section (4) of section 16 of the said Act, but no demand notice/statement under section 73 or section 74 of the said Act has been issued. 3.2 Where demand notice/ statement under section 73 or scetion 74 of UPGST Act has been issued but no order under section 73 or section 74 of UPGST Act has been issued by the Adjudicating Authority:

In such cases, the Adjudicating Authority shall take cognizance of sub-section (5) or sub- section (6) of scction 16 of the UPGST Act, inserted retrospectively with effect from 01.07.2017, and pass appropriate order under section 73 or section 74 of the UPGST Act. 3.3 Where order under scction 73 or section 74 of the UPGST Act has been issued and appeal has been filed under section 107 of the UPGST Act with the Appellate Authority but no order under section 107 of the UPGST Act has been issued by the Appellate Authority:

In such cases, the Appellate Authority shall take cognizance of sub-section (5) or sub- section (6) of section 16 of the UPGST Act, inserted retrospectively with effect from 01.07.2017, and pass appropriate order under section 107 of the UPGST Act. 34 Wh?r'c order undt':r section 73 or section 74 of the UPGST Act has been issued and Revisional Authority has initiated proceedings under section 108 of the UPGST Act, Page 3 of7 DA cen issucd by the Revisional but no order under section 108 of the UPGST Act has been issued by Authority: . .

In such cases, the Revisional Authority shall take cognizance of sub-sectic ) section (6) of section 16 of the UPGST Act, inserted retrospectively with effect from 01.07.2017, and pass appropriate order under section 108 of the UPGST Act n (5) or sub- 3.5 Where order under section 73 or section 74 of the UPGST Act has been issucd but no appeal against the said order has been filed with the Appellate Authority, or where the order under section 107 or section 108 of the UPGST Act has been issued by the Appellate Authority or the Revisional Authority but no appeal against the said order has been filed with the Appellate Tribunal:

In such cases, where any order under section 73 or section 74 or section 107 or se 108 of the UPGST Act has been issued confirming demand for wrong availment of i tax credit on account of contravention of provisions of sub-scction (4) of section 16 of t UPGST Act, but where such input tax credit is now available as per the provisions of sub-section (S) or sub-section (6) of section 16 of the UPGST Act. and w against the said order has not been filed, the concerned taxpayer may apply for rectification of such order under the special procedure under section 148 of the [ PGST Act notified vide Notification No.-1665/X1-2-24-9(47)/17-T.C.272-U.P. Ac Order-(335)-2024 dated 08.01.2025, within a period of six months from the d 3.5.1 The taxpayers can file an application for rectification electronically. after login to www.gst.gov.in, using their credentials, by navigating as below in various cases: a. In case where an application for rectification of an order issued under section 73 or section 74 of the UPGST Act is to be filed:

i. Click Dashboard > Services > User Services > My Applications. ii. Select "Application for rectification of order” in the Application Type field. Then, click the NEW APPLICATION button.

b. In case where an application for rectification of an order issued under section 107 of the UPGST Act is to be filed: i Click Dashboard > Services ii. Additional Notices and Orders page is displayed. Click the View hyperlink to 20 to the Case Details sereen of the issued Notice/Order. Case Details page is displayed, The APPLICATIONS tab is selected by default. Select the ORDERS tab and click the "Initiate Rectification” link. > User Services > View Additional iii.

¢. In case where an application for rectification of an order issued under section 108§ of the UPGST Act is o be filed: Page g of 7 i. Click Dashboard > Services > User Services > View Additional ii. Additional Notices and Orders page is displayed. Click the View hyperlink to go to the Case Details screen of the issued Notice/Order. ili. Case Details page is displayed. The NOTICES tab is sclected by default. To submit Rectification Request against the Revision Order issued to you by the Revisional Authority, select the ORDERS tab and click the "Initiate Rectification" link.

3.5.2 While filing such application for rectification of order, the taxpayer shall upload along with the application for rectification of order, the information in the proforma in Annexure A of the said notification, containing infer-alia the details of the demand confirmed in the said order of the input tax credit wrongly availed on account of contravention of sub-section (4) of section 16 of the UPGST Act, which is now eligible as per sub-section (5) and/or sub-section (6) of section 16 of the UPGST Act. 3.5.3 Such application for rectification shall be dealt by the proper officer who had passed the order for which the said rectification application has been filed. The said officer shall take a decision on the said application for rectification and issue the order, as far as possible, within a period of three months from the date of such application. Besides, in case where any rectification is being made by the proper officer in the order for which the rectification application has been filed, he shall also upload a summary of the rectified order electronically in FORM DRC-08 in cases where rectification of an order issued under section 73 or section 74 of the UPGST Act is being made, and in FORM GST APL-04, in cases where rectification of an order issued under section 107 or section 108 of the said Act is being made. While taking a decision on such application for rectification filed under the said special procedure, the proper officer shall also consider other grounds, if any, for denial of input tax credit, other than contravention of sub-section (4) of section 16 of the UPGST Act, invoked in the concerned notice issued under section 73 or section 74, as applicable, in respect of the said amount of input tax credit.

3.5.4 Where the rectification adversely affects the said person, the principles of natural justice shall be followed by the said proper officer.

3.5.5 Further, it is to be noted that in cases where any rectification has been made by the proper officer in the order for which the rectification application has been filed, an appeal against such rectified order can be filed under the provisions of section 107 or section 112 of the UPGST Act, as the case may be, within the time limit specified therein.

4. It is pertinent to note that in terms of section 36 of The Uttar Pradesh Goods And Services Tax (Second Amendment) Act, 2024, nq refund of tax already paid or input tax credit already reversed would be available, where such tax has been paid or input tax credit has been reversed on account of contrayention of provisions of sub-section (4 of section 16 of the UPGST Act, and Where such input tax credit is now available Page 5 of 5 i f the UPGST as per the provisions of sub-section (5) or sub-section (6) of section 16 0 Act.

It is to be noted that the rectification application of an order issued undc_r section ‘7,, nt ) i i i s UPGST Act, can be filed under the section 74 or section 107 or scction 108 of the UPG : Ppaptpssfs Act-1-2017-Order-(335)-2024 dated 08.01.2025, within a period of 5|.\‘ m(m'l NS the date of 8th October,2024., only in cases where the issue or one of the |w.lc\ on which the demand has been confirmed in the said order, pertains to wrong availment of input tax credit on account of contravention of provisions of sub-section (4) of section 16 of the UPGST Act, and where such input tax credit is now available as per the provisions of sub-section (5) or sub-section (6) of section 16 of the UPGST Act. In. cases where no such issue is involved and a taxpayer requires to file an application of rectification of an order, such rectification application can be filed by the taxpayers only under the provisions of section 161 of the UPGST Act, within the time limit specified therein. In case a taxpayer has filed an application for rectification of an order under the special procedure notified vide Notification No.-16635/X]-2-24- 9(47)/17-T.C.272-U.P. Act-1-2017-Order-(335)-2024 dated 08.01.2025. but where it is found that the issues in the said order do not involve any issue of wrong availment of input tax credit on account of contravention of provisions of sub-section (4) of section 16 of the UPGST Act, and where such input tax credit is now available as per the provisions of sub-section (5) or sub-section (6) of section 16 of the UPGST Act. such an application would be summarily rejected by the proper officer with a remark that, “The rectification application is rejected as it is found that the same is not covered under the Notification No.-1665/X1-2-24-9(47)/17-T.C.272-

U.P.

Act-1-20]7- Order-(335)-2024 dated 08.01.2025, as no such issue is involved in the said order pertaining 10 wrong availment of input tax credit on account of contravention of provisions of sub-section (4) of section 16 of the UPGST Act, and where such input tax credit is now available as per the provisions of sub-section (5) or sub-section (6) of section 16 of the UPGST Act”.

6. It is requested that suitable trade noti this Circular.

ces may be issued to publicize the contents of

7. Difficulty, if any, in the im plcmenlalion of this Circular may be brought to the notice of the Undersigned.

By Order, 1o\ Commissioner, State Tax, Uttar Pradesh.

Copy To:

1. Joint Commissioner (LT, ), State Tax R for uploading the Circul h Departmemai Website. ax HQ, Lucknow for uploading the Circular on the State Tax HQ, Lucknow.

Page 7 of 7

Provisions this circular answers to

Read out of the instrument itself: an enabling provision is one it says it was made under, which is the power it rests on. The rest it names without resting on.

Other instruments under the same Act

All of the The Uttar Pradesh Goods and Services Tax Act, 2017