- The Madras High Court ruled that a registered person is not entitled to claim Input Tax Credit (ITC) if the tax charged for a supply of goods or services has not been paid to the government, as required by Section 16(2)(c) of the Central Goods and Service Tax Act.
- The case involved a company purchasing goods from a supplier with a cancelled GST registration, and despite having paid the amount to the supplier, the court decided that the company was not entitled to claim ITC.
- This ruling serves as a precedent for businesses dealing with suppliers who have cancelled GST registrations and highlights the importance of complying with the GST Act’s provisions and rules.
- Businesses must exercise caution and conduct due diligence when dealing with suppliers to avoid any potential loss of ITC entitlement.
Source Taxguru
