Admissibility of ITC on purchase from ab-initio-cancelled dealers.

[Asked by Guest]

Sir,

I want to be enlightened on the captioned issue.

Can the ITC once enjoyed as legal, be termed as

'unauthorised' for no apparent fault of the Purchaser?

[Pradip Kumar Maitra, 9433420121]

[Ganeshan Kalyani]

Yes sir it will be denied because unregister dealer do not pay tax. And if tax is not paid then credit would not be passed on. Thanks.

AI Summary

Input Tax Credit denial: purchases from ab initio cancelled suppliers disallowed because supplier did not remit tax, breaking the credit chain.
Input Tax Credit on purchases from ab initio cancelled suppliers is disallowed where the supplier, treated as an unregistered dealer, has not paid the tax; the denial rests on the supplier's non remittance breaking the credit chain rather than on fault of the purchaser.