GST Input disallowed on account of e invoice not issued by supplier

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A business is facing disallowed input tax credits for FY 2020-2021 because their suppliers failed to issue e-invoices. Despite efforts to contact suppliers, many cite confidentiality and haven't disclosed their turnover, hindering verification of e-invoicing compliance. The buyer is being held responsible for the suppliers' non-compliance, and they are seeking solutions for this predicament.

vamsi krishna

vamsi krishna (Querist)

18 December 2024 Dear Sir/Madam,

We have received a notice stating that all input tax credits for FY 2020-2021 have been disallowed due to the non-availability of e-invoices. Upon reviewing the status of suppliers from the e-invoice portal , we found that most of them have not enabled e-invoicing. We reached out to the suppliers to inquire about their turnover; however, citing confidentiality, many suppliers have refused to disclose this information.

For larger suppliers, we have been able to confirm their compliance and engage with them regarding e-invoicing. However, if a supplier has exceeded the turnover threshold for e-invoicing but has not registered or generated e-invoices, we, as buyers, are being held accountable for their non-compliance.

Is there any resolution or remedy available for this situation?

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 December 2024 While there is no simple fix for the current situation where your suppliers have not complied with e-invoicing requirements, your best course of action is to continue following up with them, document all communication efforts, and potentially engage with GST authorities for guidance or relief. If you have suffered ITC denial, explore the appeals process, and make sure you are proactive about ensuring supplier compliance in the future.

vamsi krishna

vamsi krishna (Querist)

19 December 2024 Thanks for the reply.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 December 2024 You are welcome.

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