GST
ITC from suppliers who did not file or were cancelled
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Facts
The officer may question ITC from suppliers with retrospectively cancelled registrations or who did not file GSTR-3B. Show genuine receipt and payment, and check the supplier's filing for that period.
Provisions and law
- Sec 16, CGST Act 2017Conditions and time limit for ITC
- Instruction 02/2022-GST (22 March 2022)SOP for scrutiny: one ASMT-10 per GSTIN per year, specific and quantified discrepancies, DRC-03 payments to be considered, timelines for ASMT-12 or further action
Analysis
Both points are listed in Instruction 02/2022-GST. Sec 16(2)(c) requires tax actually paid by the supplier, so this is a real risk area. Example: ITC of ₹90,000 from a supplier whose registration was later cancelled from an earlier date; show that they filed returns for those months, plus your transport and bank proof. If the supplier truly did not pay, take advice before reversing.
Conclusion
- Check each supplier's status and filing history.
- Gather receipt and payment proof.
- Explain where the supplier did file.
- Reverse with interest where you cannot support it.
A Savvy can do this for you
Scrutiny of returns, ASMT-10 notice and ASMT-11 reply
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