Ahead of the fourth GST Anniversary on July 1, the Industry regulatory body ‘PHD Chamber of Commerce’ has voiced an opinion that the buyer should be permitted to claim credit for taxes even if the supplier has been the defaulter in payment of GST.
The PHD Chamber of commerce also said that during a meeting of the GST Council Secretariat that is scheduled on June 14, it shall seek clarification on whether in case of Covid essential items excess credit shall be refunded to the dealers.
It is worthwhile mentioning here that for Covid related items, the GST rate was reduced 
Bimal Jain, Chairman, PHD Chamber of Commerce while talking to PTI said that the Buyer pays tax to the supplier; however, if the supplier defaults in depositing the tax then the buyer cannot claim the credit for taxes that are paid on inputs.
“So if buyer’s input tax credit (ITC) is blocked, it is double taxation. Then the supplier who has defaulted you are not taking any action against him, rather you are going to a genuine buyer who has paid the taxes, and you are blocking his credit. This is incorrect. This is the most burning issue, which we are going to raise before the Joint Secretary GST Council.”
Subsequently, the National-Profiteering Authority said that the suppliers have to correspondingly decrease the prices so that consumer finally gets the benefit. It also tried to persuade tax officers for collecting evidence in case suppliers have not reduced the prices accordingly.
As per section 171 of the CGST Act 2017, any decrease in the rate of the tax on the supply of goods or services or the advantage of the input tax credit should be passed on to the receiver by way of a corresponding reduction in prices.
Jain further added that a large number of employers are providing to their employees mask, sanitiser, hand gloves, medicines and so employers expect that they should be allowed tax credit on the aforesaid items.
Read Also: GST Rates for Surgical Mask, Sanitizer & Hand Wash
“The question is this being provided for personal consumption? No. It is being provided to protect the health of employees who are the backbone of businesses. But credit for this is being disputed. What was envisaged in GST? That it will be a seamless flow of credit in the supply chain and there would be no cascading of taxes. But these credits are being disputed,” Jain added.
Jain further said that although from April 1, 2019 onwards, for affordable and non-affordable housing, the GST rate has been cut to 1% and 5% respectively; nevertheless, builders cannot claim credit for the taxes that are paid on inputs such as steel and cement.
Lastly and Importantly, he further added that there are many builders who wish to enter into the supply chain and claim the input tax credit 
