Input Tax Credit Cannot Be Denied for Supplier’s Default: Tripura HC

Imagine this situation. You buy goods from a registered GST supplier. You pay the invoice value including GST. You file your returns properly and claim Input Tax Credit (ITC). Months later, the department tells you: “Your supplier never paid GST to the Government. Reverse the ITC, pay tax again with interest and penalty.” Sounds unfair? The Tripura High Court thought so too. In a landmark ruling, the Court has held that a bona fide purchaser cannot be punished for the supplier’s failure to deposit GST, and has read down Section 16(2)(c) of the CGST Act, 2017 to protect genuine taxpayers....