- Gujarat High Court upheld the constitutional validity of section 16(2)(c) of the CGST Act and refused to “read it down.”
- The petitioners argued ITC should not be denied to bona fide buyers who have invoices, received goods/services, and paid tax to the supplier, even if the supplier fails to deposit it.
- The Court rejected this view, holding that ITC is a statutory concession subject to strict conditions and that GST’s destination-based structure supports the supplier-payment requirement.
- It distinguished earlier Delhi and Tripura High Court rulings by relying on GST provisions like sections 41(2), 53, 155, and rule 37A.
- The Court acknowledged hardship for genuine purchasers but said it cannot rewrite clear statutory language, while urging the government to improve supplier-payment verification mechanisms.
Source: in.kpmg.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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