IGST Credit Taken as CGST and SGST Not ‘Wrongly Availed’ Under Section 73: GSTAT Hyderabad

The GST Appellate Tribunal’s Hyderabad Bench set aside a ₹68.52 lakh demand on a software company, holding that a missing supplier certificate under Circular 183 cannot by itself justify denying credit.

The GST Appellate Tribunal, Hyderabad, has held that credit of IGST charged on inter-State supplies but availed under the heads of CGST and SGST is not input tax credit (ITC) “wrongly availed” within the meaning of Section 73 of the CGST Act, 2017. The Bench of A P Ravi, Member (Judicial), who wrote the order, and Duvvuri Krishna Srinivas, Member (Technical), allowed the appeal against a demand of ₹68,52,254 for July 2017 to March 2018 [Innominds Software Private Limited v. Commissioner of State Tax & Ors., 2026-juristway.com-3240-GSTAT(Hyderabad)-GST].

The credit related to two invoices of 30 Mar 2018 issued by an SEZ unit, on which IGST was paid and reflected in the appellant’s GSTR‑2A. The first appellate authority upheld the demand solely because the appellant did not produce the Chartered Accountant’s certificate contemplated by Circular No. 183/15/2022-GST.

Following the Supreme Court’s order in Bhandari Scrap Traders v. Union of India (Special Leave Petition (C) No. 23931/2026), the Bench treated Section 16(2)(c) as a condition to be satisfied, with the burden on the appellant under Section 155. It found that burden discharged, since the IGST stood in GSTR‑2A, consideration had been paid, and the Revenue placed nothing to show non-payment by the supplier.

On the circular, the Bench held that “the certificate is a means of verification of the condition in Section 16(2)(c), and it is not a further condition of eligibility.” It added that the circular’s mechanism was not engaged where the IGST was already reflected in GSTR‑2A, and that the officer had not first taken the verification steps the circular itself prescribes.

Relying on the Kerala High Court’s ruling in Rejimon Padickapparambil Alex v. Union of India (2024/KER:88762), the Bench held that availing the credit under the wrong head was an error of reporting, not an availment of credit the appellant was not entitled to. It expressly did not rest its decision on revenue neutrality, and held that Section 77 of the CGST Act and Section 19 of the IGST Act address tax paid by a supplier, not credit availed by a recipient.

With the tax demand gone, interest and penalty fell with it. The Bench also held that the pre-deposit of ₹6,85,226 must be refunded with interest under Section 115, though no specific prayer had been made.

2026-juristway.com-3240-GSTAT(Hyderabad)-GST