ITC CLAIM BENEFIT

As per section 16 of the CGST act  2017  one has  to  fulfill  following  conditions  for Input  Tax credit 

1)  one   must  have valid  Tax  invoice with correct  GSTN no . 

2)  one  must  received  Goods  or  service 

3)  Supplier should pay Tax to the Govt account  collected  form you  

4)  He must  file return  . 

You are  correct  Sir  but  this what  act  says ,  you have solve the issue  with mutual  understanding and flow up  . 

Suppliers Mistake- Denial of ITC- Analysis of Sec 16.

Conditions to be fulfilled: a) Tax Invoice- You have b) Received goods/ services - You have received c) tax paid to supplier- d) Supplier has filed return- You do not know-

option 1- write to supplier that you are not going to pay him GST till he files GSTR1 + 3B ( he need to file his return also after paying the taxes) - if invoice not paid.

option 2 - If paid & supplier is a regular supplier raise a debit note for GST and in future do not pay GST part till he files.

Option 3 - if 1 & 2 not possible. Keep the evidence of correspondence with supplier, payment receipt + invoice and tell govt- not to expect the impossibility of becoming the assessment officer + recovery officer of all your vendors if there is a demand.

Dispute the denial if the revenue does deny at some time in future. IN the service tax law there were decisions which said that credit could not be denied. However, in VAT law ITC could be restricted if the supplier did not pay.

From July 1 2019 IF the new returns are there then this draconian and unfair provisions would only apply in case of fake invoice + disappearing suppliers.