In a recent ruling by the Tamil Nadu Appellate Authority for Advance Ruling (AAAR), it was determined that TR-6 challans are not valid documents for claiming Input Tax Credit (ITC) under the Central Goods and Services Tax (CGST) Act and Rules. This decision came in response to an appeal by M/s Becton Dickinson India Pvt. Ltd., which had paid Integrated Goods and Services Tax (IGST) through TR-6 challans as part of import valuations directed by Special Valuation Branch (SVB) orders.
The appellant argued that these challans, along with SVB orders and customs correspondence, should be considered valid proof of tax payment for ITC purposes. However, the Authority for Advance Ruling (AAR) initially rejected this claim, stating that TR-6 challans are not included in the list of documents specified in Rule 36(1) of the CGST Rules for availing ITC. Upon appeal, the AAAR upheld this decision, reiterating that TR-6 challans cannot replace a Bill of Entry or a tax invoice from a registered supplier as valid tax-paying documents.
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The AAAR further clarified that correspondence from customs or SVB authorities does not meet the documentary requirements under Section 16(2) for claiming ITC. Additionally, since TR-6 challans are not recognized by the Act or Rules, the issue of time limitation under Section 16(4) for availing ITC does not apply. Consequently, the appeal was dismissed, affirming that ITC cannot be claimed on taxes paid through TR-6 challans, even when linked to SVB assessments.
Order Date: 09 May 2025
Case Title: M/s Becton Dickinson India Pvt. Lt.
Coram: Shri Madan Mohan (Chief Commissioner, CGST & CX) and Shri S. Nagarajan (Commissioner of Commercial Taxes, Tamil Nadu)
Facts:
- The appellant imported goods under Special Valuation Branch (SVB) orders and paid IGST through TR-6 challans as directed by Customs.
- It sought to avail Input Tax Credit (ITC) on the IGST so paid, arguing that the TR-6 challan, read with the SVB order and customs correspondence, was a valid proof of tax payment.
- The Authority for Advance Ruling (AAR) rejected the claim, holding that TR-6 challans are not among the documents listed in Rule 36(1) of the CGST Rules for availing ITC.
- The appellant challenged this before the Appellate Authority for Advance Ruling (AAAR), seeking recognition of TR-6 challans as eligible documents.
Issue:
- Whether TR-6 challans issued for payment of IGST on import valuation adjustments constitute valid documents for availing input tax credit under the CGST Act and Rules?
Order:
- The AAAR held that TR-6 challans are not prescribed tax-paying documents under Rule 36(1) and cannot substitute for a Bill of Entry or tax invoice issued by a registered supplier.
- It further observed that correspondence from customs or SVB authorities cannot serve as an equivalent documentary basis for claiming ITC under Section 16(2).
- The Authority clarified that as TR-6 challans are not recognised by the Act or Rules, the question of time limitation under Section 16(4) for availing ITC does not arise.
- Consequently, the appeal was dismissed, affirming the AAR’s view that ITC cannot be claimed on taxes paid through TR-6 challans even when linked to SVB assessments.
