Regarding ITC Reversal

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A client faces a demand to reverse Input Tax Credit (ITC) with interest and penalty because their supplier's GST registration was cancelled retrospectively. However, the goods were purchased when the supplier's registration was active. Experts suggest arguing this point, as the cancellation wasn't retrospective at the time of purchase. Citing relevant High Court judgments, such as those from Kolkata, may strengthen the case against the reversal.

jignesh sitapara

jignesh sitapara (Querist)

10 January 2025 Dear Experts,
My client has purchase goods as on 26-09-2017. Now, his supplier GST registration cancel (suomoto) as on 28-01-2020. Now department want to reverse ITC with interest & penalty.
Now, is this possible ??

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

11 January 2025 No in this case you can argue that there is no retrospective cancellation and the goods were purchased in 2017 at that time the registration was active. you can prepare good arguments and cite case laws like the Kolkata HC judgments.

jignesh sitapara

jignesh sitapara (Querist)

13 January 2025 Thanks for Reply Sir.
Also request you to please provide judgments copy, If possible.

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