Courts clarify that input tax credit cannot be denied merely because a supplier’s GST registration was cancelled retrospectively. Authorities must examine the genuineness of the buyer’s transactions and supporting documents.
Explains how GST scrutiny under ASMT-10 can escalate into demand notices under Sections 73, 74 or 74A when discrepancies in returns remain unresolved.
The article examines the issue of whether uploading notices or orders on the GST portal constitutes valid “communication” under Section 169 of the CGST Act, particularly in cases where taxpayers claim they were unaware of such uploads. Section 169 prescribes multiple modes for serving notices and orders, including personal delivery, post, email, publication, or making […]
Section 64 of the CGST Act empowers the proper officer to undertake summary assessment in special cases where any delay is likely to adversely affect revenue. This provision is intended only for urgent situations — for example, unaccounted goods in transit, perishable goods, or fly‑by‑night dealers where immediate crystallisation of liability is essential. It is an exception […]
High Courts have emphasized that ITC cannot be denied solely on the basis of a supplier being declared non-existent. Authorities must provide evidence of the buyer’s involvement and follow principles of natural justice.
Under Section 74A, the limitation for issuing GST demand notices becomes 42 months for all cases. This is longer than the earlier three-year limit for non-fraud cases, increasing compliance exposure for bona fide taxpayers despite procedural simplification.
GST professionals can face penalties for alleged facilitation of fake invoicing or bogus ITC. A well-drafted engagement letter helps define scope, shift responsibility to the client, and reduce exposure under Section 122(3A).
ITC reversal is valid only when common credit is used for both taxable and exempt supplies and Rule 42 is strictly applied. Courts have ruled that arbitrary or lump-sum reversals without statutory computation are illegal.
Courts have questioned the practice of denying ITC by calling suppliers “non-existent” while simultaneously taxing outward supplies. The emerging judicial view protects bona fide buyers and rejects inconsistent fact-finding that causes cascading taxation.
Courts have clarified that “reason to believe” under GST must rest on tangible material, not mere suspicion or template notices. Arbitrary cancellations, searches, and arrests without recorded reasons are legally unsustainable.
