Can You Avail Credit on IGST Paid via TR-6 Challan?
By Author | June 27, 2025
Authority for Advance Ruling (AAR), Tamil Nadu News
🧾 Background of the Case
In M/s Becton Dickinson India Pvt. Ltd. [Ruling No. 20/ARA/2025, dated May 09, 2025], the Tamil Nadu AAR ruled that TR‑6 challan is not a prescribed document under GST rules. Therefore, Input Tax Credit (ITC) on IGST paid via this method cannot be availed.
🔍 Business Model and Import Adjustments
The applicant is a manufacturer and trader of medical devices. It operates under a Limited Risk Distributorship Agreement with overseas group entities.
According to the agreement:
- If the applicant earns more than the arm’s-length profit margin, it refunds the excess.
- If it earns less, the supplier pays the shortfall.
These post-import adjustments lead to differential IGST payments.
📦 Customs Assessment Across Ports
In FY 2023–24, the applicant imported goods via Chennai Sea, Air Cargo, and FTWZ ports.
- Chennai Sea Customs allowed reassessment of original Bills of Entry.
- Chennai Air Cargo and FTWZ directed the applicant to deposit the differential IGST through TR‑6 challans.
Due to conflicting approaches, the applicant sought clarification from the AAR.
❓ Key Questions Raised
- Can the applicant avail ITC on IGST paid via TR‑6 challan under Section 16(2) of the CGST Act and Rule 36 of the CGST Rules?
- Does the time limit under Section 16(4) apply to ITC on IGST paid via TR‑6 challan?
- Does the same time limit apply to ITC on IGST paid through re‑assessed Bills of Entry?
- If yes, does the clock start from the original Bill of Entry date or the reassessment date?
⚖️ AAR’s Ruling and Key Observations
📌 On TR‑6 Challans:
The AAR clearly held that TR‑6 challans are not prescribed documents under Rule 36(1)(d). Only Customs-prescribed documents like:
- Bills of Entry
- Courier Bills of Entry, and
- Other documents defined under the Customs Act
are valid for availing ITC.
Since TR‑6 challans aren’t listed under Customs regulations, they cannot be used to claim ITC.
📌 On the Preferred Route:
The AAR emphasized that reassessment of original Bills of Entry is the correct method for paying differential duties. These documents automatically transmit data to the GSTN, enabling valid ITC claims.
In contrast, TR‑6 challans lack such integration and fail the statutory transmission requirement.
🔁 Pre-GST vs. Post-GST Era
Under the earlier CENVAT Credit Rules, TR‑6 challans were acceptable for credit. However, the GST framework has changed that. Now, only automated, system-integrated documents qualify for ITC.
This ensures data integrity and eliminates manual intervention.
⏳ Time Limit for Availing ITC
The AAR confirmed that Section 16(4) of the CGST Act applies to:
- Both original and re‑assessed Bills of Entry.
- IGST credit claimed on imported goods.
As per Section 20 of the IGST Act, all CGST conditions (including time limits) apply mutatis mutandis to IGST.
Importantly, the time limit starts from the re‑assessment date, not the original import date. That’s because the liability to pay differential duties arises only after reassessment.
