GSTAT Holds Surplus IGST Credit Can Offset CGST and SGST Shortfalls:

Sansco Technologies (Kerala) Private Limited is a super distributor of Oppo Mobile India Private Limited in Kerala, was issued a show cause notice dated 22 July 2023 under Section 73(1) of the CGST and KSGST Act, 2017. The notice alleged excess availment of Input Tax Credit amounting to Rs 13,97,613 based on a comparison of GSTR-2A and GSTR-3B.

The adjudicating authority confirmed the demand through an order dated 14 December 2023. The taxpayer’s appeal was subsequently dismissed by the Joint Commissioner (Appeals), SGST Department through an order dated 6 June 2025.  The appellant argued that the demand had been raised on the basis of an incorrect and incomplete comparison of ITC figures. According to the appellant, the authorities had failed to consider the latest GSTR-2A data, the figures reported in Table 8A of GSTR-9 for FY 2017-18, and IGST credit of Rs 56,31,242 paid on imported goods.

The Tribunal examined the reconciliation statement submitted by the appellant and observed that the Revenue had neither disputed nor rebutted the material figures presented during the proceedings. The reconciliation, which incorporated the latest GSTR-2A figures and IGST paid on imports, showed that the aggregate eligible ITC was Rs 45,24,29,934.57, whereas the credit availed in GSTR-3B was Rs 44,78,81,069.87. Thus, the eligible credit exceeded the credit availed by Rs 45,48,864.70.

The Tribunal noted that the apparent shortfall was Rs 1,37,242.10 under CGST and Rs 1,36,452.71 under SGST, while the appellant had unutilised IGST credit of Rs 48,22,559.51. It held that, under Section 49(5)(a) of the CGST and KSGST Act, surplus IGST credit remaining after payment of IGST liability could be utilised towards CGST and SGST liabilities in the prescribed order.

The Tribunal also noted that the original adjudicating authority had failed to grant the appellant a personal hearing or discuss its submissions in the order. It described the adjudication order as a unilateral account of allegations, passed in violation of the principles of natural justice. The appellate authority had also failed to analyse the taxpayer’s evidence and contentions and had mechanically confirmed the original order through a non-speaking order.

The GSTAT allowed the appeal filed by Sansco Technologies (Kerala) Private Limited and set aside the order-in-appeal, granting relief.