Head-wise ITC Mismatch Does Not Amount to Excess ITC Where Total Credit Remains Within Eligible Limit { Lucknow Test House v. Shashi Bhushan Singh [2026] 189 taxmann.com 977 (GSTAT – Lucknow)}
Facts:
The assessee had availed ITC, but there was a head-wise mismatch in the allocation of ITC under IGST, CGST and SGST. The department treated this mismatch as excess availment of ITC and raised a demand along with interest and penalty. However, when the ITC was considered on an aggregate basis, the total ITC claimed by the assessee was within the eligible ITC available in the Electronic Credit Ledger.
Issue:
Whether a head-wise mismatch in IGST, CGST and SGST, without any actual excess availment of total ITC, can be treated as wrongful/excess availment of ITC and consequently attract tax, interest and penalty.
Held:
The GSTAT held that mere mismatch in the classification/allocation of ITC under different tax heads does not amount to excess availment of ITC, when the overall ITC claimed is within the eligible credit available to the assessee. Since there was no actual excess availment of ITC, the demand of tax could not be sustained. Consequently, the interest and penalty also could not survive. The Tribunal also relied upon the relevant CBIC clarification and Rule 88B of the CGST Rules in reaching its conclusion.
