What to check before you pay a GST supplier, and what a cancelled registration means for your ITC

1. Is the GSTIN well formed? Validate the 15-character pattern, the state code and the check character in your own code. It costs nothing and catches typos before you spend a call.
2. Is the registration Active? Look up the GSTIN and read its status. If it is not Active, stop here.
3. Does the legal name match? The same lookup returns the legal and trade names. Compare them with the invoice, ignoring punctuation and words like "Private" and "Limited".
4. Are returns being filed? Read the filing history for the current financial year, and find out first whether the supplier files monthly or quarterly, because a quarterly filer has normal gaps.
5. Are there other registrations on the PAN? Optional, but useful when an invoice carries a GSTIN from a different state than you expected.

Save the result with the date you checked. A status is true on the day you look, and what you will want later is evidence of what you saw when you paid. Checks 2 to 4 are two to three API calls at 1 credit each; a credit costs ₹0.40 to ₹0.80 before 18% GST, and every account starts with up to 100 free lookups.

Section 16(2) of the CGST Act says input tax credit is available only if every one of a set of conditions holds. Paraphrasing the ones that depend on your supplier, as the section reads on 4 October 2026:

• You hold a tax invoice or debit note issued by a registered supplier (clause a).
• The supplier has furnished the invoice details in its statement of outward supplies and they have been communicated to you (clause aa).
• The credit details communicated to you in GSTR-2B have not been restricted (clause ba).
• The tax charged has actually been paid to the government, in cash or through credit (clause c).

Two further points. If you do not pay the supplier within 180 days of the invoice date, the credit has to be paid back with interest, and can be claimed again once you pay. And Section 16(4) sets a last date for claiming credit on an invoice: the 30th of November following the end of the financial year, or the filing of the annual return, whichever is earlier.

So a supplier who does not file GSTR-1 means your invoice may never reach your GSTR-2B, and one who does not pay the tax means condition (c) is in doubt. Both are checkable in advance through the supplier's filing history, which is why check 4 above matters.

Under Section 29(2), the proper officer may cancel a registration from such date, "including any retrospective date", as he thinks fit. The grounds listed there include contravention of the prescribed provisions, a regular taxpayer not filing returns for the prescribed continuous period, and a registration obtained by fraud, wilful misstatement or suppression of facts. A hearing must be given first, and the officer may suspend the registration while proceedings are pending.

Rule 21 spells out some of the prescribed grounds. Among them are no business at the declared place, invoices issued without any supply, availing credit in violation of Section 16, and no returns for six continuous months for a monthly filer or two continuous tax periods for a quarterly filer.

The consequence for a buyer is simple to state and hard to manage: a supplier that looks Active today can later be cancelled from an earlier date. Section 29(3) says cancellation does not affect the supplier's liability for periods before it took effect.

We want to be careful here, because this is where the answer depends on facts and professional advice. What we could confirm from primary sources: Section 16(6) lets a person claim credit within set windows where a cancellation is later revoked. We did not find a CBIC circular that settles a recipient's credit when a supplier is cancelled with retrospective effect.

Courts have been asked about buyers caught this way. We have not verified any specific ruling against the court's own order, so we do not cite one. If you are exposed to a cancelled supplier, take advice from a chartered accountant or tax counsel with the actual invoices in hand. The practical protection is what this post is about: checking before you pay, keeping dated proof of the check, and being told when a supplier's status changes.

The GST portal's public search by GSTIN shows the registration status, the date of cancellation if there is one, suspension and its effective dates, and, by financial year, the returns filed and whether the taxpayer files monthly or quarterly. For one supplier, that is enough. It needs a captcha for each search, and it gives you a screen, not a record.

An API earns its cost when you have many suppliers, when the check has to sit inside onboarding or a payment run, or when you want a timestamped result stored with the payment. The public view also does not tell you that the tax was paid, which is the substance of Section 16(2)(c); a filing history is the nearest signal, not proof.

A check on the day of onboarding goes stale. Our monitoring feature re-checks the GSTINs on a watchlist, daily by default (weekly and monthly are options), and raises an event when something changes. A move to Cancelled, Suspended or Inactive is marked critical, and a return to Active is marked as information. Other status changes, a change of taxpayer type, a block on e-way bills or a change of cancellation date rank as high; a change of name or address as medium.

Monitoring also tracks filing: a supplier whose last filed period is five months or more old is marked as lagging, and eight months or more as stopped, thresholds deliberately set wide so that quarterly filers are not flagged. Alerts arrive as an email digest or a signed webhook. The first five vendors are free.