Claiming IGST Credit on Imports? Maharashtra AAR Emphasises the Deadline

Claiming Input Tax Credit (ITC) accurately is not just a best practice—it’s critical for maintaining healthy cash flows and staying compliant with GST laws. In a recent case, M/s ADI Enterprises, a manufacturer of ear buds, sought clarity from the Maharashtra Authority for Advance Ruling (AAR) on whether ITC on IGST paid at the time of import can still be claimed after the statutory deadline. The ruling has important implications for all importers.

When the IGST Claim Was Flagged

M/s ADI Enterprises imported machinery from overseas and paid ₹9,00,939 in IGST via a valid Bill of Entry dated 24th August 2022. This credit was correctly reflected in the company’s:

• GSTR-2A for August 2022, and
• GSTR-2B for March 2023

However, the company did not claim this ITC in its GSTR-3B return—not for the relevant months and not even before the extended deadline of 30th November 2023 for FY 2022–23, as prescribed under Section 16(4) of the CGST Act.

On 21st March 2024, the company received an email from the GST Department alerting them about the unclaimed IGST credit visible in GSTR-2B but not reported in GSTR-3B. This triggered a critical compliance question:
Can this unclaimed IGST credit still be availed in a future GSTR-3B return, or is it time-barred?

Understanding IGST on Imported Goods

When goods are imported into India, IGST is levied at customs clearance, and the Bill of Entry is the document that confirms payment. As per GST provisions, this IGST is eligible for ITC, just like GST on domestic purchases.

However, visibility in GSTR-2A or 2B does not automatically grant the credit. It needs to be actively reported and claimed in GSTR-3B within the statutory time frame.

Decoding GSTR-2A, 2B, and 3B

• GSTR-2A is a dynamic form that updates as and when suppliers file their returns.
• GSTR-2B is a static monthly statement, generated on a specific date, showing ITC eligible for a particular period.
• GSTR-3B is the actual return through which businesses claim ITC.

ITC appearing in 2B has no legal standing unless claimed in 3B. This is where many businesses falter mistaking visibility for validity.

Is There a Deadline for IGST Credit on Imports?

M/s ADI Enterprises approached the AAR with a clear legal query:
While Section 16(4) of the CGST Act lays down a deadline for claiming ITC on invoices and debit notes, it does not explicitly mention Bills of Entry. So, does the deadline still apply to IGST credit arising from imports?

Sections 16(4), 31, Rule 46, and Section 20 of IGST Act

• Section 16(4) of the CGST Act mandates that ITC must be claimed by 30th November of the following financial year or the date of filing the annual return, whichever is earlier.
• Section 16(2)(a) requires the claimant to possess a valid tax invoice or "any other tax paying document as may be prescribed."
• Section 31 of the CGST Act defines what constitutes a valid invoice, while
• Rule 46 of the CGST Rules includes documents like the Bill of Entry under acceptable tax documents for claiming ITC.
• Most importantly, Section 20(iv) of the IGST Act makes provisions of the CGST Act including ITC conditions applicable to IGST “mutatis mutandis” (with necessary changes).

AAR's Verdict: Time Limit Applies to Imports Too

After examining the relevant provisions, the Maharashtra AAR ruled that:

• Even though the Bill of Entry is not specifically mentioned in Section 16(4), it falls under the broader scope of “tax paying documents” under Section 16(2) and Rule 36(1)(d).
• Since Section 20(iv) of the IGST Act extends CGST rules to IGST, the same time limit applies to imports as well.
• The intent of the law is to ensure timely ITC claims and maintain fiscal discipline. Therefore, ITC on imports is not exempt from the deadline.

Final Outcome

M/s ADI Enterprises was not allowed to claim the IGST credit in a later GSTR-3B filing. The 30th November 2023 deadline had passed, and the claim was declared time-barred under Section 16(4).

Why This Ruling Matters to Importers

This case sends a strong compliance message:

"If you miss the deadline, you lose the credit - even if it appears in your system."

For importers, this means:

• Track IGST paid on each Bill of Entry.
  
  
• Ensure it is reflected and claimed in GSTR-3B within the deadline.
  
  
• Don’t assume that system-generated forms like GSTR-2B are enough to safeguard your claim.

Conclusion

The Maharashtra AAR has clearly ruled that the time limits under Section 16(4) apply uniformly whether the ITC is based on a domestic invoice, debit note, or Bill of Entry for imports. Even if the credit is visible in GSTR-2B, it holds no legal value unless it is actively claimed in GSTR-3B within the prescribed period.

This case is a reminder for businesses to tighten internal GST controls, track deadlines vigilantly, and treat import-related ITC with the same urgency as any other domestic claim.