Registration suspension and solution

[Veeresham Veerabomma]

Greetings of the day !!!

In recent times in Telangana majority Registrations of the Tax Payers are under suspension with an allegation of ITC claimed from the Non-existent dealers or ITC availed from retrospective cancelled dealers. In spite of submission of substantial documents and other information department neither dropping the proceedings nor Cancelling the registration of the recipient dealer. Debate must continue, in an direction of Hon'ble High Court suggested the counsel for the Petitioner that registration can be activated but ITC should not avail. Is it the way of pronouncement of the ......... What are the solutions please. Here pertinent to note that majority registrations have been suo moto cancelled/suspended by the department either Central or State during the Fake registration drive. Till such time entire transaction are reflecting in the domain by way of GSTR-2B and status filing the 3B of the so called alleged suppliers.

[KASTURI SETHI]

Sh.Veeresham Veerabomma Ji,

The charge of fake invoice is very very serious. In case you think all the registered persons (whose registrations have been suspended) are honest and sincere and true towards availment of ITC and their transactions are genuine; and despite that total injustice has been done to them by the department, you should write to the Chairman CBIC with a copy to PMO Office, New Delhi along with documentary evidence for fair justice.

At the same time I am of the view that the department must have documentary evidence for suo moto suspension.

So think twice before going ahead.

Disclaimer : These are my personal views and meant for education purpose and not meant for any court proceedings.

[Shilpi Jain]

There has been a recent decision of the Madras HC which has held that retrospective cancellation of registration cannot affect the ITC of the reciepient.

So unless there is a collusion between the recipient and supplier, the ITC should not be denied.

[Shilpi Jain]

Whether in the petition filed by person whose registration was cancelled also seek whether ITC will be available to recipient? I do not think so. So the HC asking to restore registration but denying ITC - is it the same decision?

[Veeresham Veerabomma]

Tank you Kasturi Sir and Shilpaji. Sorry for the late response as I was busy in last three weeks. Regret.

AI Summary

Input tax credit protection may survive supplier's retrospective registration cancellation absent collusion, challenging suspension practices. Widespread suo moto suspension or cancellation of GST registrations has occurred over allegations of ITC claimed from non-existent or retrospectively cancelled suppliers, with taxpayers submitting evidence yet facing continued proceedings. The core legal issue is whether a recipient's entitlement to Input Tax Credit survives a supplier's retrospective cancellation; commentary and a recent court view suggest ITC should remain available absent collusion, and taxpayers are advised to seek higher administrative review with documentary proof.