“A tax paid is not a credit earned—unless it’s claimed before the clock runs out.”
The Hidden Trap in Import GST
If your business imports goods and pays IGST through a Bill of Entry, there's something you must know:
There’s an expiry date on your ability to claim that GST as credit. And if you miss it—by even one day—the loss is permanent.
This is not theory. It’s exactly what happened in the Adi Enterprises ruling by the Maharashtra AAR. Let’s unpack the ruling and what it means for your business.
The Case in Brief
Case: Adi Enterprises, In re
Citation: [2025] 175 taxmann.com 652 (AAR - Maharashtra)
Date: 29 April 2025
Issue: Can IGST credit on imported machinery (via Bill of Entry) be availed after the time limit in Section 16(4) of the CGST Act?
The Facts
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In August 2022, Adi Enterprises imported machinery from China.
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IGST was paid through the Bill of Entry.
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The credit appeared in GSTR-2A (Aug 2022) and 2B (Mar 2023).
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But it was not claimed in GSTR-3B for FY 2022–23.
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A claim was attempted after 30 November 2023.
✅ AAR held: Too late. Credit is lost.
The Law: Time is the Boundary
Section 16(4), CGST Act:
Credit cannot be claimed after:
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30 November following the end of the financial year, or
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the date of the annual return,
whichever is earlier.
Section 20, IGST Act:
Brings IGST under the same rules.
So, Bill of Entry = Invoice, for this purpose.
💡 The Takeaway: Whether domestic invoice or import document, the clock starts ticking from the financial year of the transaction—not when it appears in your GSTR-2B.
The Wake-Up: What the Ruling Teaches Us
Just because the IGST shows up in your GSTR-2B doesn’t mean you can still claim it.
It’s your job to:
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Track each Bill of Entry
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Know which FY it falls in
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Claim in GSTR-3B before 30 Nov of next FY
Because after that, no authority can help you.
What This Looks Like in Real Life
| Item | Date |
|---|---|
| Machinery Imported | August 2022 |
| FY to which it relates | 2022–23 |
| Last date to claim ITC | 30 Nov 2023 |
| Claimed after this? | ❌ Credit lapses permanently |
Common Mistakes Importers Make
| Assumption | Reality |
|---|---|
| “Imports are Customs, so GST time limits don’t apply” | ✅ IGST on BoE is part of GST credit regime |
| “GSTR-2B shows it in March, so I can claim it then” | ❌ 2B is only a reference — BoE date controls the timeline |
| “We’ll catch up during audit” | ❌ Too late. 30 Nov is hard stop |
| “It’s capital goods; we can claim any time” | ❌ No such exception exists in law |
Conscious Compliance: Your Action Framework
Every Bill of Entry is a ticking timer. Start treating it like one.
| What You Should Do | Why It Matters |
|---|---|
| Keep an import-wise BoE + IGST log | Visibility on aging ITC |
| Reconcile GSTR-2A/2B monthly | Prevent backlog panic |
| Don’t wait for GSTR-2B reflection | Use actual BoE date for ITC planning |
| Conduct a credit check by October | Gives time to catch any misses |
| Sync procurement and finance teams | Many credits are lost at the interface |
| Use ITC-tracking software or dashboards | Alerts before credits expire |
The Business Cost of Delay
Say your business imports ₹60 lakhs of machinery.
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IGST paid = ₹10.8 lakhs
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ITC not claimed on time?
→ Gone. -
No depreciation benefit under Income Tax
→ Double blow. -
Net cash loss = ₹12–14 lakhs, depending on tax impact
The machine stays. The credit dies.
FAQs
Q: Can I revise GSTR-3B to add the missed ITC?
No. GSTR-3B is final. Once the time is gone, it's gone.
Q: Which governs the time limit — GSTR-2B or Bill of Entry?
Bill of Entry date. That’s the legal trigger.
Q: Is there any scope for appeal or exception?
Courts and tribunals have consistently treated Section 16(4) as non-negotiable.
Final Word: Don't Let It Expire
In GST, you don’t lose credit when you import.
You lose it when you fail to claim it on time.
The Adi Enterprises case is not about bad intent. It's about a common oversight — and a law that doesn’t forgive it.
Let it be your business’s compliance mirror:
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Review your BoEs.
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Recheck your open credits.
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Reclaim what’s yours — before it expires.
