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CS Executive · Tax Laws and Practice · Input Tax Credit and Computation of GST Liability

Under section 38(2)(b) of the CGST Act, 2017, credit on a supply cannot be availed, wholly or partly, where the supplier's details were furnished under section 37(1) in which of the following situations?

Credit cannot be availed where the supplier defaulted in paying tax and the default continued for the prescribed period. Section 38(2)(b)(ii) lists this as one of the supplier-side circumstances. Early filing, same-State location and invoice value are not grounds for restricting credit under that clause.

  1. AThe supplier has defaulted in payment of tax and the default has continued for the prescribed periodCorrect
  2. BThe supplier has filed the statement before the due date
  3. CThe supplier is located in the same State as the recipient
  4. DThe recipient has purchased goods exceeding Rs 1 lakh in value

Explanation

Section 38(2)(b)(ii) covers a registered person who has defaulted in payment of tax where the default has continued for the prescribed period. Early filing, same-State location or the invoice value are not listed grounds.

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