Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

GST Registration Suspended And ITC

1795 views

Save Share

Vaibhav Shendure

41 Points Posted on 10 October 2021

I have purchased goods from Supplier whose GST Registration has been suspended due to department's mistake from January, 2021 and I have taken full ITC on those invoices.....but the supplier is not able to file his GSTR1 till now .... whether any problem will arise as I have taken ITC of those invoices which has not reflected in GSTR 2A/2B

Replies (5)

Quick Summary

This discussion addresses a common GST issue where a buyer has claimed Input Tax Credit (ITC) on goods purchased from a supplier whose GST registration was suspended. While the supplier's GSTR1 filing is affected, the buyer is concerned about the validity of their ITC claim, especially since the invoices haven't reflected in GSTR 2A/2B. The advice highlights that while the law (Section 16(2)(c) of CGST Act) suggests ITC may not be eligible if the supplier hasn't paid tax, several case laws in both VAT and GST regimes have allowed ITC even in such scenarios, suggesting a potential avenue for claiming credit through legal references.

CA ABHAY GUPTA

Practice

3235 Points Posted on 10 October 2021

The facility to declare invoices in GSTR1 raised to recipient having suspended GSTIN is under testing and will be made available soon... this is as per twitter handler of GST TECH..

Vaibhav Shendure

41 Points Posted on 10 October 2021

So there will not be any problem regarding ITC claimed ???

CA ABHAY GUPTA

Practice

3235 Points Posted on 10 October 2021

ITC is claimed as per sec 16(2) of CGST Act, when all the four conditions laid down in clause a, b c & d of Sec 16(2) fulfills, in your case since supplier GSTIN is suspended he might have not paid tax on the supplies made to you thus the condition laid down in Sec 16(2)(c) is not getting fulfilled thus you are not eligible to claim ITC. This is as per provision of law. but various case law was there in VAT regime and same are in GST era where it was held that the ITC credit will be allowed even in the case of non payment of tax by supplier.. thus by taking references to the case law you can claim ITC.