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One Start, Many States: GST Master TRN Explained
Expanding into another state? GST Master TRN saves repeat form-filling. Learn what changes, what stays separate and the 15-day deadline.
Read insightPaying a supplier is not the end of the GST risk. In a recent decision, the Supreme Court upheld the legal condition that the tax charged on a supply must actually be paid to the Government before the recipient can retain input tax credit (ITC).
The headline: a genuine invoice, receipt of goods or services and payment to the vendor remain important—but they do not remove the statutory condition in Section 16(2)(c) that the tax must reach the Government.
On 24 July 2026, in Bhandari Scrap Traders v. Union of India, the Supreme Court dismissed the challenge to the Gujarat High Court ruling and upheld its view on Section 16(2)(c) of the CGST Act.
What the ruling means in plain English
When a supplier collects GST but does not deposit it, the buyer’s ITC can be affected. This moves supplier compliance from a back-office concern to a direct working-capital risk.
- An invoice alone is not enough. The tax-payment condition remains part of the law.
- Commercial paperwork still matters. Keep the purchase order, tax invoice, proof of receipt, bank payment and delivery evidence together.
- Resolve a supplier issue promptly. Where tax is later paid, the GST law provides a re-availment mechanism. The procedure and timing need to be checked for the relevant return period.
What it does not mean
This is not a reason to panic at every mismatch. A GSTR-2B entry is a supplier-reporting signal, not a substitute for review. It also does not decide the facts of a particular transaction. If a supplier’s return is late, an invoice is missing, or registration is later cancelled, first reconcile the transaction and take advice before making a reversal or response.
GSTN describes GSTR-2B as a static auto-drafted statement built from supplier filings; taxpayers still have to self-assess eligibility. Read the GSTN guidance on GSTR-2B.
A practical vendor-control checklist
- Before onboarding: verify the GSTIN, legal name, banking details and business address. Use written purchase order or engagement terms.
- Before releasing material payments: match the invoice, receipt or delivery evidence and tax calculation.
- Every month: reconcile purchases with GSTR-2B and follow up immediately on unexplained gaps.
- For high-value or recurring vendors: maintain a vendor risk register and set out invoice, filing and indemnity responsibilities in the contract.
- If an issue arises: preserve emails, orders, proof of payment and receipt of goods or services. Do not rely on verbal assurances.
What should a business do now?
Build a monthly ITC review into the accounts process. The purpose is not to punish reliable vendors; it is to find gaps early enough to correct, hold or document them. The GST portal itself explains that GSTR-2B should be used to take the right credit in GSTR-3B. View the official GSTN FAQ.
Need help with GST returns or ITC reconciliation? Karfiling can help you maintain a regular review process and prepare your GST returns. The correct action in a disputed ITC matter depends on the documents, supplier position and applicable law.
Sources
- Bhandari Scrap Traders v. Union of India, Supreme Court, SLP(C) No. 23931/2026, order dated 24 July 2026
- GSTN: Form GSTR-2B FAQ
This article is for general information and is not legal or tax advice. The right treatment of ITC depends on the facts, documents and law applicable to your case.