Section 16 (2) (c)

[Komal Agarwal]

One of my client purchased goods and paid to supplier during FY 2018-19. Supplier filed GSTR-1 properly and filed GSTR-3B Nil. Later department cancelled supplier’s GST no with retrospectively. Now the SCN issued by department to us referring section 16(2)(c) of the CGST Act for payment of tax with interest as the supplier did not deposited the amount to department. What remedy available to us. Please refer case law also in tax payer’s favor.

AI Summary

Client Faces Tax Notice Under Section 16(2)(c) of CGST Act Despite Meeting ITC Conditions; Experts Advise Contesting. A client purchased goods in FY 2018-19, and the supplier, who filed GSTR-1 correctly but GSTR-3B as Nil, had their GST registration canceled retroactively. The tax department issued a notice under Section 16(2)(c) of the CGST Act for tax payment with interest due to the supplier's failure to deposit taxes. Experts suggest contesting the notice, arguing that the client fulfilled all conditions for Input Tax Credit (ITC) and should not be penalized for the supplier's fault. They recommend presenting documentary evidence to support the genuineness of the transaction and consulting a professional for a comprehensive legal strategy.