GST
Supplier GST cancelled retrospectively from an old date
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Facts
Retrospective cancellation of a supplier does not by itself mean your credit is lost. If the supplier was active on the invoice date and you have proof of genuine purchase and payment, you have a defence.
Provisions and law
- Sec 16(2)(c), CGST Act 2017ITC is allowed only if the tax charged has actually been paid to the Government by the supplier.
- Sec 155, CGST Act 2017The person who claims ITC has the burden of proving that the claim is genuine.
- Sec 29(2), CGST Act 2017The officer may cancel registration for reasons such as non-filing of returns, business not conducted from the declared place, or registration obtained by fraud.
Analysis
Keep screenshots or records showing the supplier's status as active when you bought. Several High Courts have held that a genuine buyer should not be penalised only because the supplier's registration was cancelled later, though outcomes depend on facts. Prepare your evidence now, before a notice comes. Confirm whether the supplier filed returns and paid tax for those months, since that strengthens your case.
Conclusion
- Check the supplier's status and return history on Search Taxpayer.
- Collect proof that the supplier was active on each invoice date.
- Build the full purchase evidence file.
- Respond to any notice with this evidence and request a hearing.
A Savvy can do this for you
Reply to fake ITC notice when a supplier is found non-existent, Sec 16(2)(c)
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