The Government of Uttar Pradesh on January 16, 2025, issued clarification on the issues regarding the implementation of provisions of sub-sections (5) and sub-sections (6) in section 16 of the UPGST Act, 2017.
Representations have been received from trade and industry requesting for clarification in respect of various issues pertaining to the availment of benefit of the said amendments in section 16 of UPGST Act to the taxpayers against whom demands have been issued alleging wrong availment of input tax credit in contravention of provisions of subsection (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-section (5) or sub-section (6) of section 16 of the UPGST Act.
The following clarification has been issued:
• 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-section (4) of section 16 of the UPGST Act has been initiated, but no demand notice/statement under section 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-section (6) of section 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 issued 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.
• Where demand notice/ statement under section 73 or section 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 subsection (6) of section 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.
• Where order under section 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 subsection (6) of section 16 of the UPGST Act, inserted retrospectively with effect from July 01, 2017, and pass appropriate order under section 107 of the UPGST Act.
[Circular No. GST/2024-25/109/State Tax]
