The Bombay High Court recently made an important decision: it said that the GST registration of a business can be cancelled if the suppliers it deals with are not real or do not exist.
🧾 What Happened?
A businessman claimed Input Tax Credit (ITC) — which means he wanted to reduce his tax by showing he had paid GST on purchases. But when the tax department checked, they found:
- The suppliers he bought from didn’t exist at their registered addresses.
- He couldn’t show any proof (like bills, delivery notes, or payment records) that he actually bought anything.
So, the GST department cancelled his registration.
⚖️ What Did the Court Say?
The businessman went to the Bombay High Court to fight the cancellation. But the court said:
- If your suppliers are fake, your ITC claim is not valid.
- You must prove your purchases are real with proper documents.
đź“Ś Why Is This Important?
This case is a warning for all businesses:
âś… Always check if your suppliers are genuine and registeredâś… Keep all invoices, delivery proofs, and payment records.
✅ Don’t claim ITC unless you’re sure the transaction is real and legal
đź“ť Final Thoughts
The GST system is becoming stricter. If you’re not careful, your registration can be cancelled — and that can stop your business.
Stay compliant. Stay safe.
