Consideration paid to third person on the direction of seller

[GAURAV SHARMA]

Namaskar,

Mr. A has purchased goods from Mr.B but has made the payment to Mr. C on the direction of Mr.B.

Whether second proviso of section 16(2)(d) violated ?

AI Summary

Debate on ITC Eligibility Under Section 16(2)(d) of CGST Act: Payment to Third Party Validity Questioned A discussion on a forum revolves around a GST-related issue where Mr. A purchases goods from Mr. B but pays Mr. C on Mr. B's direction. The main question is whether this violates the second proviso of Section 16(2)(d) of the CGST Act, which requires payment to the supplier for input tax credit (ITC) eligibility. Amit Agrawal believes that payment to Mr. C is valid, as it is directed by Mr. B, while Kasturi Sethi and others argue that such a method might invite legal issues and is not advisable. Participants suggest documenting the transaction properly to avoid complications.