India's GST Council Considers ITC Protection for Buyers Amid Supplier Tax Default Concerns

The GST Council’s law panel has approved a proposal to protect Input Tax Credit (ITC) for buyers even when suppliers fail to remit GST. Under the scheme, a buyer’s ITC will be safeguarded once the supplier’s GSTR‑2B is filed and the buyer submits banking or payment proof. The measure, long demanded by genuine purchasers, is slated for full GST Council review after fitment committee approval.

High Courts across several states have previously ruled that a supplier’s tax default cannot deny a buyer’s legitimate ITC claim, highlighting a statutory gap that the new proposal aims to close. Tax professionals caution taxpayers against relying solely on third‑party data when disputing GST notices, noting that the burden of proof remains with revenue authorities and urging a robust defence based on the taxpayer’s own records.