Answer

1. F

   Facts

   A retrospective cancellation of the supplier does not by itself prove your purchase was fake. Show that the supplier was active on the invoice date and that the purchase was genuine.

2. P

   Provisions and law

   • Rule 86A(1), CGST Rules 2017Commissioner or authorised officer, not below Assistant Commissioner, may disallow debit of ITC for recorded reasons where the supplier or recipient is non-existent, goods were not received, tax was not paid or there is no valid document
   • Sec 16(2), CGST Act 2017ITC needs a tax invoice, receipt of goods or services, tax actually paid by the supplier and the recipient's return
   • CBIC guidelines on Rule 86A, 2 November 2021Block must rest on material evidence, not suspicion; amount not more than the suspect credit; monetary limits for officer ranks; taxpayer may give evidence for review
3. A

   Analysis

   Rule 86A blocks need material evidence, not just a supplier's later cancellation. Check the supplier's GSTIN status history and whether your invoices appear in GSTR-2B. Example: invoices dated May 2025 appeared in your GSTR-2B and the supplier was active then; the cancellation in 2026 was with effect from April 2025. Show the supplier filed returns for those months, plus your receipt and payment proof.

4. C

   Conclusion

   1. 1Search the supplier GSTIN on the portal and save the status and filing history.
   2. 2Show your invoices in GSTR-2B for those months.
   3. 3Attach receipt, transport and payment proof.
   4. 4Argue that you could not have known of the later cancellation.
   5. 5Ask for release of the credit.

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.