📰 𝗣𝗮𝘁𝗻𝗮 𝗛𝗶𝗴𝗵 𝗖𝗼𝘂𝗿𝘁 𝗥𝘂𝗹𝗶𝗻𝗴: 𝗜𝗧𝗖 𝗗𝗲𝗻𝗶𝗮𝗹 𝗜𝗳 𝗦𝘂𝗽𝗽𝗹𝗶𝗲𝗿 𝗙𝗮𝗶𝗹𝘀 𝘁𝗼 𝗥𝗲𝗺𝗶𝘁 𝗧𝗮𝘅 📢 𝗖𝗼𝘂𝗿𝘁’𝘀 𝗦𝘁𝗮𝘁𝗲𝗺𝗲𝗻𝘁: "The purchasing dealer must ensure tax payment by the supplier to claim ITC."

🔍 𝗙𝗮𝗰𝘁𝘀: •𝗖𝗮𝘀𝗲 𝗧𝗶𝘁𝗹𝗲: M/s Aastha Enterprises vs The State of Bihar •𝗖𝗼𝘂𝗿𝘁: Patna High Court •𝗗𝗮𝘁𝗲: 18-Aug-2023

𝗜𝘀𝘀𝘂𝗲: The case focused on whether a taxpayer could claim input tax credit (ITC) when the supplier failed to remit the collected tax to the government, even though the taxpayer had paid the supplier.

𝗣𝗿𝗼𝗰𝗲𝗲𝗱𝗶𝗻𝗴𝘀: Aastha Enterprises contended that its ITC claim should be allowed since it provided proof of payment to the supplier. They argued that denying ITC, despite fulfilling payment requirements, contradicted the objective of avoiding tax cascading under GST. However, the State argued that ITC eligibility under Section 16 of the GST Act requires actual tax remittance by the supplier.

⚖ 𝗝𝘂𝗱𝗴𝗺𝗲𝗻𝘁: The Patna High Court held that mere possession of tax invoices or proof of payment to the supplier does not entitle the purchaser to ITC. The court ruled that all conditions under Section 16(2), including supplier remittance, must be satisfied. The burden rests with the purchasing dealer to verify tax remittance, and ITC cannot be claimed if the supplier fails to pay the government.

📜 𝗜𝗺𝗽𝗹𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀: This ruling stresses that purchasers must perform due diligence on suppliers’ compliance with GST remittance to safeguard ITC claims. It reinforces the legal requirement for strict adherence to GST conditions and shifts some compliance responsibility onto purchasers to verify suppliers' actions. Team GSTpanacea 7503031378