Tax Consultant

Input Tax Credit Cannot Be Denied to Bona Fide Buyer Due to Supplier’s Bogus Billing & Retrospective GST Registration Cancellation – Legal Position, Case Laws & Remedies Introduction A recurring and high-stakes dispute under GST is denial of Input Tax Credit (ITC) to a genuine recipient merely because the supplier’s GST registration is cancelled retrospectively on allegations of bogus billing / fake invoicing. In many cases: The recipient purchased goods or availed services in the normal course of business Full payment including GST was made through banking channels ITC is reflected in GSTR-2A / GSTR-2B Later, the supplier’s registration is cancelled ab initio alleging fake billing The department issues a Show Cause Notice (SCN) proposing ITC reversal, interest and penalty This article explains: What the CGST Act, 2017 and Rules actually provide Whether ITC can be denied to a bona fide purchaser Supreme Court and High Court jurisprudence (in favour and against) Action steps to ...

Section 31 of CGST Act, 2017 – Tax Invoice Updated on: February 2026 (as applicable till date) Prepared by: Yours Tax Consultant 1. Scope and Importance of Section 31 Section 31 lays down the statutory requirement for issuance of tax invoice for supply of goods or services or both. Issuance of a valid tax invoice is mandatory for: Charging GST Availing Input Tax Credit (ITC) Return filing and compliance An incorrect or delayed invoice can result in: Denial of ITC Penalty under GST law 2. Tax Invoice for Supply of Goods – Section 31(1) A registered person supplying taxable goods shall issue a tax invoice : Before or at the time of removal of goods for supply to recipient, or Before or at the time of delivery of goods, where movement is not involved This applies to all taxable supplies of goods. Relevant Rules: Rule 46 – Contents of tax invoice Rule 48 – Manner of issuing invoice ...