Importers into India pay duty at the time of import of goods, and the duty so paid (including the Basic Customs Duty and Integrated Goods and Services Tax) is reflected on the Bill of Entry filed in the ICEGATE system. The ICEGATE system is linked to the GST portal, and accordingly the IGST paid is reflected in GSTR-2A and GSTR-2B to enable the taxpayers to avail input tax credit (‘ITC’) in their electronic credit ledger (‘ECL’).
Problem arises when the duty paid at the time of import is incorrect, and additional duty is paid by the importer much after the import. The reasons for payment for such additional duties could be various: incorrect duty payment at the time of import on account of a mistake in fact or law, difference in interpretation with the Customs Department leading to issuance of Consultative Letter/Show Cause Notice demanding differential duty or passing of Order confirming additional duty payment; or payment during initiation of an investigation by Customs department or DRI. In all such cases, the additional duty is paid under a TR-6 Challan.
Under the GST Regime, framework for availing ITC is prescribed. Section 16 of the Central Goods and Services Tax Act, 2017 (‘CGST Act’) read with Rule 36 of the Central Goods and Services Tax Rules, 2017 (‘CGST Rules’) outline the documentary requirements for claiming ITC. Specifically, Rule 36(1)(d) permits availing of ITC on the basis of a Bill of Entry or any ‘similar document prescribed’ under the Customs Act, 1962 for the assessment of integrated tax on imports. Relevant extract of Rule 36 of the CGST Rules is as follows:
“36. Documentary requirements and conditions for claiming input tax credit.-
(1) The input tax credit shall be availed by a registered person, including the Input Service Distributor, on the basis of any of the following documents, namely,-
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(d) a bill of entry or any similar document prescribed under the Customs Act, 1962 or rules made thereunder for the assessment of integrated tax on imports;”
The CGST Rules do not explicitly mention TR-6 Challan as a valid document for availing ITC. This has led to disputes regarding whether the TR-6 Challan qualifies as a ‘similar document prescribed’ under Rule 36(1)(d).
The CBIC issued Circular No. 16/2023-Cus dated 7 June 2023, as directed by the Hon’ble Supreme Court in the case of Union of India & Ors. v. Cosmo Films Ltd.[1], to facilitate refund or ITC claims. The Circular expressly mentioned that TR-6 Challan is not a valid document for availing ITC and hence taxpayers should go for reassessment of BoE.
The question of availing credit on the basis of TR-6 Challan came before the CESTAT, Hyderabad in the case of Aurobindo Pharma Ltd. v. Commissioner of Customs[2], where the Appellant argued that they were unable to claim credit on the basis of the TR-6 Challan, as it was not a document of assessment under Rule 36 of the CGST Rules. It was further submitted that the Customs online system lacked the functionality to issue assessment documents under Sections 28(1)(b), (2) and (3) of the Customs Act, 1962. The Tribunal in this case rejected the appeal noting that the issue of lack of documentation was not raised earlier in the proceedings and therefore could not be entertained at that stage.
A similar issue was discussed by the Authority for Advance Ruling (AAR), Tamil Nadu in the case of Becton Dickinson India Private Limited[3] wherein it was decided that TR-6 Challan cannot be considered as a valid document for availing ITC under the GST regime, even when read with SVB orders and letters from Customs authorities. The ruling emphasized that Rule 36 of the CGST Rules, 2017 prescribes specific documents, such as a Bill of Entry, for ITC claims and TR-6 Challan is not among them. Consequently, credit cannot be availed on the basis of a TR-6 Challan.
Recently, the Madras High Court, in the case of Data Patterns India Ltd. v. Joint Commissioner of Central Tax[4], granted interim relief by staying recovery proceedings against the petitioner, who has challenged the denial of ITC on IGST paid via TR-6 Challan.
Past jurisprudence:
The payment of additional duty using a TR-6 Challan was disputed by the department in erstwhile regime as well. Historically, under the pre-Goods and Services Tax (GST) regime, with effect from 16 June 2005, TR-6 Challan was considered as an eligible document to claim credit. The Cenvat Credit Rules (‘CCR’) was amended to introduce challan under Rule 9 of CCR as eligible document to avail Cenvat Credit. Prior to the aforesaid amendment, the validity of availing credit using TR-6 challan was raised before the Hon’ble Bombay High Court in the case of Commissioner of C. Ex. v. Essel Propack Ltd.[5]. The Bombay High Court held that in any event (i.e. irrespective of whether the document was specifically included as eligible document for availing credit or not), Cenvat credit should be available. In light of the said judgement, TR-6 challan can be said to be a valid document for availing ITC. This decision was subsequently followed by the Hon’ble Madras High Court in the case of Commissioner of C. Ex. & S.T. v. MRF[6].
Therefore, the issues that whether the payment made under TR-6 Challan will be considered as extension of assessment under Section 28 of Customs Act and will qualify as document to avail ITC, needs to be settled in the light of earlier jurisprudence. The voluntary payment made under challan or during investigation and accepted by customs authority to be considered as assessment for the purpose of availing ITC in terms of Rule 36 of the CGST Rules that is, a TR-6 Challan should be considered a document of assessment under Rule 36 of the CGST Rules, on the basis of which credit can be taken.
Currently, the circular issued by CBIC post the judgement given by Hon’ble Supreme Court in the case of Cosmo Films (supra) states that under GST law, a TR-6 Challan is not a prescribed document for the assessment of integrated tax/compensation cess on imports on which ITC can be availed.
It is a well-settled principle that the CBIC circulars are only binding on the Department. In any case, a circular which is contrary to the statutory provisions has no existence in law[7]. Therefore, a circular cannot override the statutory provisions of the CGST Act or Rules. If TR-6 Challan qualifies as a ‘similar document prescribed’ under the Customs Act for assessment purposes, then denying ITC solely based on a circular is not legally tenable.
As the CGST Rules clearly mention that ITC can be taken on the basis of any ‘similar document prescribed’ under the Customs Act, 1962 for assessment of integrated tax on imports, credit should be available basis the TR-6 Challan. The mere absence of the expression ‘TR-6 Challan’ in Rule 36 and the circular issued by CBIC should not lead to disallowance of an otherwise legal and valid claim. As long as the genuineness of TR-6 challan is verified, credit of the duty paid therein ought to be available as per the provisions of the GST law. To claim input tax credit is a substantive right vested in taxpayers and is one of the fundamental features of GST law. The seamless flow of ITC is introduced to remove cascading effect (tax on tax) to the fullest, which is the core idea and intention to introduce GST law. The denying of credit claimed on account of filing of TR-6 Challan is against the spirit of GST and the idea of ease of doing business. Moreover, the denial of credit increases the cost of doing business and ultimately burdens the consumer, contrary to the objectives of GST being tax on value addition.
Section 18A was introduced in the Customs Act vide Finance Act, 2025 and the same provided for assessee to voluntarily revise entries in accordance with the procedure set out in the Regulations issued. Regulations in this regard were recently introduced.[8] While the Regulations provide for assessee to voluntarily revise entries in Bills of Entry and pay additional duty through an online system, it does not state that on such payment the Bill of Entry will be reassessed. Thus, problems regarding availing of credit of IGST paid might continue to exist even in cases where assessee is availing the provisions of Section 18A.
To avoid frivolous litigation, the GST Council should issue clarification in order to achieve ease of doing business. Until such clarification is issued, taxpayers may continue to face uncertainty regarding the availability of credit based on the TR-6 Challan.
The Prime Minister of India in its speech on 15 August 2025 highlighted that to build an ‘Atmanirbhar Bharat’, the Central Government is proposing significant reforms in GST focusing on three (3) pillars, namely; 1. structural reforms; 2. rate rationalisation, and 3. ease of living[9].
The third pillar, ease of living, includes reforms qua:
1. Registration: seamless, technology-driven, and time-bound, especially for small businesses and startups.
2. Return: implement pre-filled returns, thus reducing manual intervention and eliminating mismatches.
3. Refund: faster and automated processing of refunds for exporters and those with inverted duty structure.
The Government should address the issue of availment of credit basis TR-6 Challan to strengthen the third pillar of ease of living.
[The authors are Executive Partner, Partner, Principal Associate and Associate, respectively, in GST and Customs practices at Lakshmikumaran & Sridharan Attorneys, Mumbai]
[1] 2023 (5) TMI 42
[2] 2025 (4) TMI 1121
[3] 2025 (6) TMI 1232
[4] 2025 (6) TMI 735
[5] 2015 (39) STR 363
[6] 2015 (40) STR 211
[7] Commissioner of C. Ex., Bolpur v. Ratan Melting & Wire Industries [2008 (231) E.L.T. 22 (S.C.)]
[8] The Customs (Voluntary Revision of Entries Post Clearance) Regulations, 2025, effective from 1 November 2025.
