India GST Tribunal issues several rulings on Input Tax Credit

The Goods and Services Tax Appellate Tribunal (GSTAT) has issued several significant rulings regarding Input Tax Credit (ITC) eligibility and procedural requirements in India.

In a ruling by the Thiruvananthapuram Bench, the tribunal held that the mere availment of ineligible ITC does not automatically constitute fraud, willful misstatement, or suppression of facts under Section 74 of the CGST Act. The tribunal set aside a demand after finding that an appellate authority introduced new grounds not present in the original show-cause notice.

Additionally, the GSTAT allowed ITC on showroom interior work, such as carpentry and painting, provided the GST component is separately accounted for and not capitalized as part of immovable property. In another case, the Ernakulam Bench ruled that a GST demand cannot be confirmed based on legal or factual grounds that differ from those originally stated in the show-cause notice.

Separately, the Central Board of Indirect Taxes and Customs (CBIC) has withdrawn a previous restriction, now allowing automobile dealers operating under the agency model to claim ITC on demonstration vehicles.