TaxSavvy

GST

Supplier registration cancelled after I claimed ITC

Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.

Find

A supplier's retrospective cancellation does not by itself mean you lose ITC. Courts have protected genuine buyers where the supplier was registered on the invoice date and the purchase is proved. But you must be able to show the transaction was real.

Provisions

Sec 16(2)(c), CGST Act 2017; Sec 155, CGST Act 2017; Rule 21, CGST Rules 2017

Analysis

In October 2026 the Punjab and Haryana High Court said Sec 16(2)(c) and Sec 155 should not be applied mechanically, and that supplier default or retrospective cancellation alone does not justify denial. The Supreme Court in 2025 took a similar view under Delhi VAT. Example: you bought Rs 12 lakh of goods in June, supplier cancelled in December from April; your e-way bills, transport receipts and bank proof are your defence.

Close

  1. Check the supplier's status and the effective date of cancellation on the portal
  2. Stop further purchases from that supplier
  3. Collect invoice, e-way bill, transport and bank proof for every purchase
  4. Check whether the supplier filed GSTR-3B for those months
  5. If a notice comes, reply with the proof and case law through a professional

Connect now

A Savvy replies in minutes.

Fixed price before you pay. Your Savvy is paid only after you accept the work.

Connect nowPay and start: Supplier due diligence: GSTIN, filing history, 2B and IMS match, red flags, ₹2,999

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

People also ask