Section 155 – Burden of Proof

Section 155 of the Central Goods and Services Tax Act, 2017 deals with the burden of proof in relation to input tax credit (ITC). It is a short but important provision because it specifically places the responsibility of proving eligibility for input tax credit on the person who claims that credit.

The statutory language of Section 155 is:

“Where any person claims that he is eligible for input tax credit under this Act, the burden of proving such claim shall lie on such person.”

In simple terms, if a registered person claims input tax credit, that person must be able to establish that the credit is legally admissible under the GST law. The provision is directly relevant when the eligibility of ITC is questioned during scrutiny, audit, investigation, assessment, adjudication or appellate proceedings.

Section 155 should be read together with the substantive ITC provisions, particularly Section 16, which sets out the basic eligibility and conditions for taking input tax credit, and Section 17, which deals with apportionment and blocked credits.

What Is Section 155 of the CGST Act?

Section 155 is titled “Burden of proof.”

Unlike many GST provisions that contain several sub-sections, Section 155 contains a single operative rule.

It states that when a person claims eligibility for input tax credit under the CGST Act, the burden of proving that claim lies on that person.

This means that a taxpayer cannot simply state that ITC was claimed and expect the eligibility to be presumed without supporting evidence.

The person claiming the ITC must be able to demonstrate that the statutory conditions applicable to that credit have been satisfied.

What Does “Burden of Proof” Mean?

The phrase burden of proof refers to the responsibility of establishing a claim by producing appropriate facts, records and evidence.

In the context of Section 155, the claim is:

“I am eligible to take this input tax credit under the GST law.”

The person making that claim carries the statutory burden of proving it.

For example, if a registered business claims ITC on a purchase of machinery, it should be able to support the claim through appropriate records and demonstrate that the applicable GST conditions have been satisfied.

The exact evidence required depends on the nature of the transaction and the particular ITC provision involved.

Why Is Section 155 Important?

Input tax credit directly affects the amount of GST that a registered person ultimately pays in cash.

Because ITC reduces output tax liability, the law requires the person claiming the credit to establish that the credit is legally available.

Section 155 therefore creates a specific evidentiary responsibility for ITC claims.

The GST Council has also referred to Section 155 in the context of placing the onus on the taxpayer claiming input tax credit to prove the legitimacy and admissibility of the credit.

Section 155 and Section 16

Section 16 is the principal provision dealing with the eligibility and conditions for taking input tax credit.

Section 16 establishes the substantive conditions that must be satisfied for ITC.

Section 155 establishes who has the burden of proving that the conditions supporting the ITC claim are satisfied.

Therefore, the two provisions work together.

Section 16

Section 16 answers:

When is input tax credit available?

Section 155

Section 155 answers:

Who must prove eligibility when the ITC claim is in question?

This distinction is important for understanding the role of Section 155.

Basic Conditions for ITC Under Section 16

Section 155 does not itself list all the conditions for ITC. Those conditions are primarily contained in Section 16 and other provisions of the CGST Act and Rules.

Section 16 contains conditions relating to matters such as:

• possession of the prescribed tax document;
• receipt of goods or services or both;
• payment of tax to the Government in accordance with the applicable statutory requirements;
• furnishing of the relevant return;
• payment to the supplier in specified circumstances;
• time limits for taking credit; and
• other conditions and restrictions prescribed under GST law.

Therefore, when Section 155 places the burden of proof on the claimant, the taxpayer must establish eligibility with reference to the applicable legal requirements.

Section 155 Does Not Create the ITC Eligibility

An important point is that Section 155 does not itself grant input tax credit.

It does not say that a taxpayer is entitled to ITC merely because the taxpayer can produce an invoice.

Instead, Section 155 deals with the evidentiary burden after a person claims eligibility.

The substantive entitlement comes from the relevant ITC provisions, especially Section 16, along with applicable provisions of Section 17, Section 18, Section 41 and the GST Rules.

Therefore:

Section 16 and related provisions → Determine substantive ITC eligibility

Section 155 → Places the burden of proving the ITC claim on the claimant

What Must a Taxpayer Prove?

Section 155 does not provide a universal checklist of documents for every ITC claim.

The evidence required depends on the particular transaction.

However, depending on the circumstances, a taxpayer may need to establish matters such as:

• identity of the supplier;
• nature of the supply;
• existence of the transaction;
• receipt of goods or services;
• tax invoice or other prescribed document;
• value of supply;
• tax charged;
• payment records;
• accounting records;
• use of goods or services in the business;
• compliance with applicable ITC restrictions;
• treatment of blocked or restricted credits; and
• compliance with applicable time limits.

The relevant evidence should correspond to the specific statutory conditions applicable to the ITC claim.

Tax Invoice Alone May Not Always Be Enough

A tax invoice is an important document for ITC purposes, but the existence of an invoice does not automatically establish every condition for claiming credit.

Section 16 itself contains multiple conditions beyond merely possessing a tax invoice.

The Supreme Court’s decision in State of Karnataka v. Ecom Gill Coffee Trading Pvt. Ltd., as referred to in an official GST Council-published advance ruling, is relevant in this context. The Supreme Court held that the burden to prove admissibility of credit lies on the taxpayer claiming the credit and observed that invoices and payment details alone were not sufficient in the circumstances of that case; additional evidence was relevant to establishing the genuineness of the transactions.

This illustrates the practical importance of Section 155.

Example – Purchase of Goods

Suppose ABC Limited purchases raw materials from a registered supplier.

ABC Limited claims ₹1,80,000 as ITC.

If the eligibility of the credit is subsequently questioned, ABC Limited may need to establish the underlying transaction and compliance with the applicable ITC conditions.

Depending on the circumstances, relevant evidence may include:

• supplier invoice;
• purchase order;
• goods receipt records;
• transport documents;
• payment records;
• inventory records;
• accounting entries; and
• other documents relevant to the transaction.

Section 155 places the burden of proving the ITC claim on ABC Limited.

Example – Input Services

Suppose a company claims ITC on professional services.

The company should be able to demonstrate that the service was actually received and that the credit satisfies the applicable conditions under GST law.

Depending on the circumstances, supporting evidence could include:

• agreement or engagement letter;
• tax invoice;
• correspondence;
• service reports;
• payment records;
• accounting entries; and
• evidence of receipt or use of the service.

Again, Section 155 places the burden of proving eligibility on the person claiming the ITC.

Example – Capital Goods

Suppose a manufacturer purchases machinery and claims ITC on the GST charged.

If the ITC is challenged, the manufacturer should be able to establish the relevant facts, such as:

• purchase of the machinery;
• invoice;
• receipt of the machinery;
• payment;
• accounting treatment; and
• compliance with the applicable ITC provisions.

The evidence required will depend on the particular facts and the provisions applicable to the claim.

Section 155 and Receipt of Goods or Services

Receipt is an important condition under Section 16.

Therefore, where a taxpayer claims ITC on a purchase, merely showing that an invoice was issued may not establish the complete ITC claim if receipt itself is disputed.

The taxpayer should maintain appropriate evidence demonstrating actual receipt of goods or services, as applicable.

For goods, relevant evidence may include:

• goods receipt notes;
• inward registers;
• stock records;
• transport documents;
• e-way bill information where applicable; and
• warehouse or delivery records.

For services, the evidence will depend on the nature of the service and could include agreements, reports, correspondence, completion records or other documentation demonstrating actual receipt.

Section 155 and Fake Invoices

Section 155 becomes particularly important when ITC is alleged to have been claimed on transactions that did not actually occur.

Where a taxpayer claims ITC, the taxpayer bears the burden of proving the eligibility of that claim.

If the department questions whether goods or services were actually supplied, the taxpayer may need to produce evidence establishing the underlying transaction.

A taxpayer should therefore avoid relying solely on accounting entries where the genuineness of the underlying transaction is in dispute.

Section 155 and Supplier Compliance

The ITC framework contains conditions concerning the tax charged on supplies and payment of tax to the Government.

Section 155 does not independently create those conditions. Rather, it places the burden on the person claiming ITC to establish eligibility under the applicable law.

The taxpayer should therefore examine the applicable provisions of Section 16 and Section 41 and the relevant Rules when evaluating an ITC claim.

The GST portal’s auto-populated information can assist with reconciliation, but taxpayers should still maintain appropriate primary records supporting the underlying transaction and eligibility.

Section 155 and Section 41

Section 41 deals with availment of input tax credit.

The current Section 41 allows a registered person, subject to the prescribed conditions and restrictions, to avail eligible ITC as self-assessed in the return.

It also provides for reversal of ITC in specified circumstances where the supplier has not paid the tax payable in respect of the supply, with re-availment when the supplier subsequently pays the tax, in accordance with the statutory framework.

Section 155 operates differently.

Section 41

Deals with the statutory mechanism for availing ITC.

Section 155

Deals with the burden of proving eligibility for the claimed ITC.

Therefore, self-assessment of ITC under Section 41 does not eliminate the evidentiary responsibility under Section 155.

Section 155 and Section 17

Section 17 deals with:

• apportionment of ITC between business and non-business use;
• apportionment relating to taxable and exempt supplies; and
• blocked credits under Section 17(5).

If a taxpayer claims ITC on an expense that falls within a restricted category, the taxpayer must be able to establish why the credit is legally admissible.

Section 155 therefore becomes relevant when the taxpayer’s entitlement to such credit is questioned.

Section 155 and Blocked Credits

Section 17(5) specifically identifies categories of goods and services for which ITC is blocked, subject to the conditions and exceptions provided in the law.

A taxpayer cannot establish ITC eligibility simply by showing that GST was charged on the purchase.

The taxpayer must also consider whether the credit is restricted or blocked under the applicable provisions.

For example, if a particular expense falls within Section 17(5), the taxpayer must examine whether any statutory exception applies before claiming the credit.

Section 155 and Apportionment

ITC may sometimes relate partly to taxable business activities and partly to exempt supplies or non-business purposes.

In such cases, Section 17 contains provisions for determining the eligible portion of credit.

The taxpayer claiming ITC should maintain sufficient records to support the calculation of the eligible amount.

Section 155 makes the taxpayer responsible for proving the claim being made.

Burden of Proof in ITC Disputes

When an ITC claim is questioned, the taxpayer should be prepared to demonstrate the factual and legal basis of the credit.

The nature of the dispute can vary.

For example, the issue may concern:

• whether the purchase actually occurred;
• whether goods were received;
• whether services were received;
• whether the supplier was genuine;
• whether the invoice relates to the taxpayer;
• whether the credit is blocked;
• whether the goods or services were used for business;
• whether the required conditions were satisfied;
• whether the credit was claimed within the applicable time limit; or
• whether the amount claimed is correctly computed.

Section 155 establishes the burden of proving the ITC claim, while the substantive provisions determine whether the claim is legally allowable.

👉 Read More → Section 157 – Protection of action taken under this Act

Section 155 Does Not Mean the Department Has No Responsibilities

Section 155 should not be interpreted as meaning that every allegation made by the department automatically becomes established.

The provision specifically says that where a person claims eligibility for ITC, the burden of proving that claim lies on that person.

It does not state that every tax demand or every allegation under the CGST Act is automatically proved merely because the department raises it.

Section 155 is specifically concerned with the burden relating to an ITC eligibility claim.

The nature of the proceedings and the applicable provisions must therefore be examined separately.

Section 155 and Natural Justice

A taxpayer should receive the procedural protections applicable to the particular GST proceeding.

If an ITC claim is proposed to be denied or recovered through an adjudication proceeding, the taxpayer should examine:

• the notice issued;
• the grounds stated;
• the evidence relied upon;
• the statutory provision invoked;
• the opportunity to respond;
• the opportunity of hearing where applicable; and
• the final order.

Section 155 establishes the burden relating to proving the ITC claim but does not replace the procedural requirements applicable to the relevant proceedings.

Importance of Documentation for ITC

Because Section 155 places the burden of proof on the person claiming ITC, maintaining proper records is an important part of GST compliance.

A business should maintain an organised record trail connecting:

Purchase → Invoice → Receipt → Accounting → Payment → ITC Claim

The precise documents will vary depending on the nature of the supply.

A strong documentary trail can help demonstrate that the credit claimed is connected with an actual and eligible transaction.

Documents That May Support an ITC Claim

There is no single document that proves every ITC claim.

Depending on the transaction, relevant records may include:

Document/Record	Possible relevance
Tax invoice	Evidence of the taxable supply and tax charged
Purchase order	Commercial evidence of the transaction
Goods receipt note	Evidence of receipt of goods
Delivery documents	Evidence supporting movement/delivery
E-way bill	Movement-related evidence where applicable
Stock register	Evidence of receipt and accounting of goods
Bank statement	Evidence of payment
Ledger account	Accounting record of transaction
Service agreement	Evidence of contractual arrangement
Service report	Evidence supporting receipt of services
Payment records	Evidence of consideration/payment
GST return records	Evidence of reporting and ITC claim
Reconciliation records	Helps establish consistency between records

The appropriate evidence depends on the nature of the transaction and the particular ITC condition being examined.

Example – ITC on Goods Not Received

Suppose a company claims ITC of ₹90,000 on an invoice for goods.

During verification, the receipt of the goods is questioned.

The company should be able to provide evidence supporting actual receipt, such as:

• delivery records;
• inward register;
• stock records;
• transport documents;
• warehouse records; and
• other relevant evidence.

The invoice alone may not resolve a factual dispute concerning actual receipt.

Section 155 makes it the taxpayer’s responsibility to prove the ITC claim.

Example – ITC on Services

Suppose a company claims ITC on consultancy services.

The department questions whether the services were actually received.

The company may need to demonstrate the actual service through:

• the consultancy agreement;
• invoices;
• reports;
• emails or correspondence;
• meeting records;
• deliverables;
• payment records; and
• accounting records.

The precise evidence depends on the nature of the consultancy.

Example – Blocked ITC

Suppose a registered person claims ITC on a particular expense.

The department points out that the expense may fall within Section 17(5).

The taxpayer must establish the legal basis for claiming the credit, including any applicable exception.

Section 155 therefore requires the claimant to support the claim rather than merely relying on the fact that GST was charged.

Section 155 and Reconciliation

Regular reconciliation can help a taxpayer identify weaknesses in ITC documentation before a scrutiny or audit takes place.

A business may reconcile:

• purchase register;
• supplier invoices;
• GSTR-2B;
• accounting records;
• goods receipt records;
• payment records; and
• GSTR-3B ITC claims.

Reconciliation does not by itself prove every aspect of ITC eligibility, but it can help identify discrepancies and strengthen the supporting record.

Section 155 and GST Audit

During an audit, the tax authorities may examine the taxpayer’s books, records and ITC claims.

If the eligibility of an ITC claim is questioned, Section 155 becomes relevant because the taxpayer has the burden of proving eligibility.

The taxpayer should therefore be prepared to produce supporting documentation and explain the basis of the credit.

Section 155 and GST Scrutiny

During scrutiny of returns, discrepancies relating to ITC may be examined.

If the taxpayer is asked to explain an ITC claim, the response should be supported by relevant records rather than only a general statement that the credit is legitimate.

A proper response should connect the facts and documents with the applicable GST provisions.

Section 155 and Litigation

Section 155 can become particularly important in litigation concerning ITC.

Where the taxpayer claims that a particular credit is admissible, the taxpayer must discharge the statutory burden of proving that claim.

The evidence required will depend on the dispute.

The Supreme Court’s decision in Ecom Gill Coffee Trading Pvt. Ltd. is particularly relevant to disputes involving proof of genuine purchases and ITC eligibility. An official GST Council-published ruling records that the Supreme Court placed the burden of proving admissibility of credit on the taxpayer claiming the credit and considered additional evidence beyond invoices and payment details relevant to proving the transaction.

Section 155 and Fake or Non-Genuine Transactions

Where ITC is claimed on transactions that are alleged to be non-genuine, the taxpayer should be prepared to establish the actual transaction.

Relevant evidence may include:

• purchase orders;
• invoices;
• transportation records;
• receipt records;
• stock entries;
• payment records;
• correspondence;
• supplier details; and
• other transaction-specific evidence.

The stronger the connection between the documents and the actual supply, the better the taxpayer can demonstrate the factual basis of the ITC claim.

Section 155 and Input Tax Credit on Imports

Import-related ITC can involve a different documentary trail from domestic purchases.

For imported goods, relevant evidence may include:

• Bill of Entry;
• import documentation;
• customs records;
• payment records;
• accounting records; and
• evidence relating to receipt and business use.

The taxpayer claiming the ITC should retain the documents necessary to establish eligibility under the applicable GST provisions.

Section 155 and Reverse Charge Supplies

Reverse charge transactions also require careful documentation.

Where the recipient is liable to pay tax under reverse charge, the taxpayer should maintain appropriate records relating to:

• the underlying supply;
• tax liability;
• payment of tax;
• accounting;
• relevant invoices or documents; and
• ITC claimed after satisfying the applicable conditions.

Section 155 remains relevant because the person claiming the resulting ITC must prove eligibility.

Section 155 and ITC Time Limit

The burden of proof under Section 155 does not extend or change the statutory time limit for claiming ITC.

The taxpayer must satisfy both:

1. the substantive conditions for eligibility; and
2. the applicable statutory time limit.

Therefore, a taxpayer cannot rely on Section 155 documentation to claim credit after the applicable legal deadline.

Difference Between Section 155 and Section 16

Basis	Section 16	Section 155
Main subject	Eligibility and conditions for ITC	Burden of proof
Main question	When can ITC be claimed?	Who must prove the ITC claim?
Nature	Substantive ITC provision	Evidentiary provision
Application	Determines eligibility	Places burden on claimant
Documents	Prescribes/relates to conditions for credit	Used to prove eligibility

Both provisions should be read together when evaluating an ITC claim.

Difference Between Section 155 and Section 17

Basis	Section 155	Section 17
Main focus	Burden of proof	Apportionment and blocked credits
Applies to	ITC eligibility claims	Specific categories and calculations of ITC
Purpose	Determines who must prove the claim	Determines eligible/restricted credit in specified cases
Practical role	Evidence	Substantive restriction/apportionment

Difference Between Section 155 and Section 41

Basis	Section 41	Section 155
Main subject	Availment of ITC	Burden of proof
Focus	How eligible ITC is availed	Who proves eligibility
Role	ITC mechanism	Evidentiary responsibility
Connection	ITC is self-assessed subject to law	Claimant must prove eligibility when questioned

Key Compliance Lessons Under Section 155

Section 155 provides a clear practical lesson for every business claiming ITC: maintain evidence capable of establishing the eligibility of the credit.

A taxpayer should not wait until an audit, scrutiny or investigation begins before reviewing ITC documentation.

Instead, businesses should maintain a transaction-level record trail from the beginning.

Maintain Complete Purchase Records

Every purchase supporting ITC should be properly recorded.

Verify Invoices

Invoices should contain the required particulars and correspond with the actual transaction.

Record Receipt

Maintain appropriate evidence of receipt of goods or services.

Reconcile ITC

Regularly reconcile ITC claimed in returns with relevant records.

Maintain Payment Evidence

Where payment is relevant to the applicable statutory condition, preserve appropriate payment records.

Review Blocked Credits

Check Section 17(5) and other applicable restrictions before claiming ITC.

Preserve Supporting Documents

Keep relevant records for the statutory retention period and longer where required because of ongoing proceedings.

Common Mistakes Related to Section 155

Businesses may face difficulties when they:

• rely only on invoices;
• fail to maintain proof of receipt;
• cannot establish the actual nature of services;
• have discrepancies between purchase registers and returns;
• claim ITC on blocked expenses;
• cannot reconcile supplier data;
• lack supporting payment records where relevant;
• maintain incomplete accounting records; or
• cannot explain the commercial purpose of a transaction.

Section 155 makes documentation particularly important because the burden of proving the ITC claim rests with the claimant.

Practical Checklist for ITC Claims

Before claiming or defending significant ITC, a taxpayer can review:

1. Is the supplier correctly identified?
2. Is the tax invoice or prescribed document available?
3. Was the supply actually received?
4. Can receipt of goods or services be demonstrated?
5. Is the transaction properly recorded in the books?
6. Is the tax amount correctly recorded?
7. Are the applicable Section 16 conditions satisfied?
8. Does Section 17 restrict or block the credit?
9. Is the credit claimed within the applicable time limit?
10. Are the return and reconciliation records consistent?
11. Are payment records available where relevant?
12. Can the taxpayer explain the commercial nature of the transaction?
13. Are supporting documents preserved?
14. Can the taxpayer produce evidence if the ITC claim is questioned?

This type of documentation is important because Section 155 places the burden of proving ITC eligibility on the person making the claim.

Key Takeaways of Section 155

The major points of Section 155 can be summarised as follows:

1. Section 155 deals with the burden of proof under the CGST Act.
2. It specifically concerns claims of eligibility for input tax credit.
3. The provision contains a single operative rule.
4. The burden of proving ITC eligibility lies on the person claiming the credit.
5. Section 155 does not itself create an entitlement to ITC.
6. The substantive conditions for ITC are primarily found in Section 16 and related provisions.
7. Section 17 is relevant where apportionment or blocked-credit provisions apply.
8. Section 41 deals with the statutory mechanism for availing ITC and operates separately from Section 155.
9. A taxpayer should maintain appropriate evidence supporting the ITC claim.
10. A tax invoice may be an important document but does not necessarily establish every condition for ITC in a disputed case.
11. Evidence of actual receipt can become important where receipt is questioned.
12. Accounting records, payment records, delivery records and transaction documents may be relevant depending on the dispute.
13. Section 155 does not mean that every tax allegation made by the department is automatically proved.
14. The provision specifically places the burden concerning an ITC eligibility claim on the claimant.
15. The Supreme Court’s decision in Ecom Gill Coffee Trading is relevant to the evidentiary burden in ITC disputes.
16. Proper documentation and reconciliation are therefore important parts of GST compliance.
17. Section 155 should be understood together with the substantive provisions governing ITC.

👉 Read More → Section 155 – Burden of proof

Conclusion

Section 155 of the CGST Act is a short provision, but it has considerable practical importance for GST compliance because it clearly establishes the burden of proof for input tax credit claims.

The section provides that where a person claims eligibility for input tax credit, the burden of proving that claim lies on that person.

This means that a taxpayer claiming ITC should be able to establish the factual and legal basis of the credit when its eligibility is questioned. The exact evidence required depends on the transaction and the relevant provisions of the GST law, but it can include invoices, purchase orders, delivery records, goods receipt records, service documents, accounting records, payment evidence and other supporting documents.

Section 155 does not itself determine whether an ITC claim is legally available. That question is governed by the substantive provisions of the GST law, particularly Section 16, along with Section 17, Section 18, Section 41 and the applicable Rules and other provisions. Section 155 instead determines who carries the burden of proving the ITC claim.

The importance of this principle is also reflected in the Supreme Court’s decision in State of Karnataka v. Ecom Gill Coffee Trading Pvt. Ltd., where the burden of proving admissibility of credit was placed on the taxpayer claiming the credit, and the evidence required to establish genuine transactions was considered in the context of the dispute.

For businesses, the practical lesson is straightforward: an ITC claim should always be supported by a reliable documentary trail. Proper invoices, proof of receipt, accounting records, transaction documents and other relevant evidence should be maintained so that the taxpayer can demonstrate the eligibility of the credit when required.

Section 155 therefore plays an important role in the GST framework by ensuring that the person who claims input tax credit also carries the statutory responsibility of proving that the credit is eligible under the law.

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