Input tax credit denial when purchasing from unregistered suppliers leads to loss of credit and reverse charge for composition taxpayers. Purchase of goods from unregistered suppliers leads to denial of Input Tax Credit to the recipient. If the recipient is registered under a composition scheme, the recipient must pay tax under the reverse charge mechanism on such purchases, creating both a loss of credit and a direct tax liability for composition taxpayers.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Input tax credit denial when purchasing from unregistered suppliers leads to loss of credit and reverse charge for composition taxpayers.
Purchase of goods from unregistered suppliers leads to denial of Input Tax Credit to the recipient. If the recipient is registered under a composition scheme, the recipient must pay tax under the reverse charge mechanism on such purchases, creating both a loss of credit and a direct tax liability for composition taxpayers.
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