GST | 'ITC Available To Buyer Only If Supplier Paid Tax', Supreme Court Upholds Validity Of S. 16(2)(c) Of CGST Act

What is this case about?

The case concerns a constitutional challenge to Section 16(2)(c) of the Central Goods and Services Tax Act, 2017, which denies Input Tax Credit (ITC) to buyers if the supplier has not paid the tax to the government. The petitioners argue this provision is arbitrary and violates constitutional rights.

Who it concerns

Petitioners: Maruti Enterprise through its authorized partner, Jigneshbhai Bharatbhai Tarpara; Respondents: Union of India & Ors.; Bench: Hon'ble Mr. Justice A.S. Supehia and Hon'ble Mr. Justice Pranav Trivedi

What the Court ordered

• The Court upheld the validity of Section 16(2)(c) of the CGST Act.
• The Court held that the provision is not arbitrary and does not violate Articles 14, 19(1)(g), 265, and 300A of the Constitution of India.
• The Court clarified that the genuineness of transactions is secured by clauses (a), (aa), (b), and (ba) of Section 16(2), and clause (c) only addresses whether the supplier has paid tax to the government.