ITC Rectification Application u/s 16(5) and 16(6) enabled on GST Portal!

In a recent update, the Central Government, following the recommendations of the 54th GST Council, issued Notification No. 22/2024-CT on October 8, 2024. This new notification provides relief to taxpayers by enabling them to file applications for rectification of demand orders related to the wrong availment of Input Tax Credit (ITC). These rectification applications can now be made for cases where ITC was wrongly claimed under Section 16(4) of the CGST Act but is now available under the newly introduced sub-sections (5) and/or (6) of Section 16.

On 07^th January 2025, GSTN issued an advisory announcing that the "Application for rectification of order" is available on the GST portal for ITC rectification!

Let’s understand the details!

GSTN Advisory dated 7^th January, 2025

Sub: Enabling filing of Application for Rectification as per Notn. 22/2024-CT, dtd. 08/10/24, 2024

Jan 7th, 2025

The Central Government, on the recommendations of the 54th GST Council, had issued Notification No. 22/2024 – CT dated 08.10.2024 and notified that any registered person against whom any order confirming demand for wrong availment of ITC, on account of contravention of provisions of sub-section (4) of section 16 of the said Act had been issued, but where such ITC is now available as per the recently inserted sub-sections (5) and/or (6) of section 16 of the Act, would now be able to apply for rectification of such demand orders.

A functionality has now been made available on the Portal for taxpayers to apply for rectification of such orders issued under section 73/74. They can file it, post login, by navigating Services > User Services > My Applications, selecting "Application for rectification of order" in the Application Type field, and clicking on the NEW APPLICATION button. A hyperlink has also been provided on the Portal to download the proforma in Annexure A in Word format, required to be uploaded after entering details of the demand order of the ITC wrongly availed on account of contravention of sub-section (4) of section 16 of the CGST Act, now eligible as per sub-section (5) and/or (6) of section 16 of the CGST Act, while applying for rectification.

Please click on: https://tutorial.gst.gov.in/downloads/news/step_by_step_process_filing_rectification_application.pdf to view a detailed step-by-step process on filing of rectification application.

Thanking You,
Team GSTN

Key Highlights

1. Notification No. 22/2024 – CT
   • Issued on October 8, 2024, following recommendations by the 54th GST Council.
   • Allows registered taxpayers to file an application for rectification of demand orders related to wrong availment of ITC due to contravention of Section 16(4), provided ITC is now eligible under Section 16(5) and/or Section 16(6).
2. Eligibility for Filing Rectification Applications:
   • Taxpayers who were issued orders confirming the demand of wrongly availed ITC under Section 16(4).
   • Rectification applies where such ITC has become eligible under newly inserted sub-sections (5) and/or (6) of Section 16.
3. Availability of Portal Functionality:
   • A new functionality has been enabled on the GST portal to facilitate the filing of rectification applications.
   • Taxpayers can log in and access this feature under:
     Services > User Services > My Applications > Application for Rectification of Order.
4. Step-by-Step Process:
   • A downloadable proforma in Annexure A (Word format) is available on the portal.
   • Taxpayers must fill in details of the demand order for ITC wrongly availed and upload it during the rectification application process.

Conclusion

The introduction of the rectification application functionality on the GST portal, as per Notification No. 22/2024-CT, is a welcome move for taxpayers seeking to correct past ITC-related orders. By leveraging the newly inserted provisions under Sections 16(5) and 16(6) of the CGST Act, businesses can now claim rightful Input Tax Credit while remaining compliant with GST regulations.

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