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Supplier has collected GST but not paying it to government and not filing returns

Hardik (Professional) (918 Points)

29 October 2019

What will be the consequences of ITC already availed when my supplier is non compliant? He issues me invoices and I have availed the ITC but he is totally non compliant..

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5 Replies

Rijo John (audit manager) (447 Points)
Replied 29 October 2019

You will get a notice from department for claiming unavailable ITC

You must keep all invoices from the supplier

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Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 29 October 2019

Dear Hardik
from Oct onwards you know very well that the ITC reflected in 2A +20% will be available to taxpayer

And before that the credit is available if you are having Original Tax Invoice & goods receipt proof.
Yes only in condition of Supplier declare defaulter or does fraudulent, its Recepient who is liable to Deposit the same with Interest of 24%

1 Like

Hardik (Professional) (918 Points)
Replied 30 October 2019

I kept on availing ITC even though the same didn't reflect in 2A ever, and amid 20-20 game I was lot more concerned about the huge ITC that I've already availed.. out of frustration when I came to know and checked GSTIN Status of supplier. Two of them haven't filed any returns since April 2019 and one of them is issuing me Invoices and collecting GST but his GSTIN status is showing "cancelled"... so whole GST amount is going to his own pocket..

I was just wondering how unfair it would be on recipient's part if he is denied the credit because of supplier's fault, and now from November onwards it would be so troublesome to comply with ITC provisions when supplier is non-compliant / fraudulent...

Pankaj Rawat (GST Practitioner) (55052 Points)
Replied 30 October 2019

Yes you are Right it's unfair with RECEPIENT. But as per Section 155 of CGST Act it's Recepient who is liable to Deposit if supplier fails.

I totally agree with you that supplier who is collecting GST & not depositing same to Govt. account is not responsible & poor Recepient who has already paid the GST to supplier is the culprit.

In short the govt say that do not deal with such supplier , but I strongly affirmed that it's totally un-fair on Recepient side.

So nothing can be done we have to follow the prescribed provision of Act .

Note : Can file Appeal but Iam not sure that it's going to help taxpayer

1 Like

subhagan sreerangam (7054 Points)
Replied 03 November 2019

From October 2019 you know very well that the ITC reflected in GSTR2A+29© will be available to Taxpayer.But up 30-09-2019 that the ITC is available if you are having Original Tax Invoices and goods receipts for producing as proof.