Summary
- The GST Department is increasingly targeting bona fide buyers under Section 16(2)(c) for Input Tax Credit reversals, despite the supplier's failure to deposit tax as required by law.
- This practice stems from the ease of tracing compliant buyers compared to defaulting sellers, who may have vanished or operated through shell entities.
- The Supreme Court's ruling in Bhandari Scrap Traders upheld Section 16(2)(c), raising concerns about fairness in enforcing tax recovery against buyers instead of sellers.
- Until legislative clarity emerges, buyers are advised to maintain comprehensive documentation to defend against potential GST notices.
Join the discussion ā sign up to comment, upvote, and save articles.