Can Input Credit Be Allowed Even When Supplier’s Registration Is Cancelled? Comparing European and Indian Jurisprudence

Abstract

A recent decision of the European Court of Justice (‘ECJ’) sheds considerable light over entitlement of a taxpayer to claim input tax credit. In the case of Întreprinderea Individuală Dobre M. Marius (C-159/17, decision dated 07.03.2) [ECLI: EU:C:2:161] the ECJ has dealt with the finer nuance and substantive extent of the entitlement available to the tax-payer. In this case, the ECJ addressed an important issue regarding the entitlement to deduct input tax in a situation where the taxpayer did not have registration during the relevant period. This article examines this decision which makes reference to the legal principles on which input tax is allowed to be deducted by businesses engaged in making supplies and also the relevance of registration for the purpose of allowing such deduction. The purpose is to compare and position the comparative jurisprudence on the subject in so far as it governs European and Indian legal systems.

Keywords: Input Credit, VAT, GST, Registration

JEL Classification: H25, K34