No ITC Reversal of GST by customer unless Revenue cannot recover dues from supplier post proceedings against him.

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No ITC Reversal of GST by customer unless Revenue cannot recover dues from supplier post proceedings against him.

 

 

Here is an important case of the GST ITC reversal.

Supreme Court Dismisses Special Leave Petition of Revenue against Decision of Calcutta High Court in Suncraft Energy Private Limited & Anr. Vs The Assistant Commissioner State Tax Ballygunje Charge & Ors.

The Supreme Court has dismissed an SLP by Revenue against the aforesaid HC Verdict.

The HC had ruled earlier that credit reversal could not be sought from the recipient of supply just because the tax had not been paid by the supplier as long as the transaction was genuine.

The Revenue Authorities were first required to proceed against the supplier to recover tax due that has been collected by him from his customer before recovery could be made from the customer. Question of recovery from customers would arise where the Revenue Authorities cannot recover tax from the supplier due to him being missing, or due to closure of his business or if there are inadequate assets.

This was with regard to credits availed for FY 2017-18 and found to be recoverable based on comparison of Form GSTR 3B figures with Form GSTR 2A figures with the former being higher than the latter.

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