India's CGST Act faces scrutiny over input tax credit rules

Legal analysis of Section 16(2)(c) of the Central Goods and Services Tax (CGST) Act in India highlights growing concerns regarding the denial of input tax credit (ITC) to purchasers due to supplier defaults. The provision is described as a harsh and penalizing measure that may inadvertently create liability for bona fide purchasers who are not at fault for their suppliers' failures to comply with tax obligations.

The discussion includes a comparative look at Australia’s Goods and Services Tax framework to evaluate how different common law jurisdictions manage the balance between protecting government revenue and avoiding the penalization of legitimate buyers.