Question9: 

Facts : A supplier is Trader in Goods. He procures goods from various vendors who are registered suppliers. Some of the vendors use HSN which have higher GST rates. On actual classification of such items, it is known that the HSN classification is incorrect and actual GST rate is lesser. The vendor is unwilling to change the HSN and the rate.  

The Query : Can the supplier use correct HSN with lower GST Rate while selling his goods even if his vendors have classified under different HSN and charged a higher Rate?

Answer:

Every supplier  is himself responsible for correct classification of goods  and payment of tax at correct rate    So it is not the issue that your vendor is not doing correct classification and accordingly you are not doing it  If the vendor is paying higher tax to consume ITC and related to you only then  it may be considered fraudulent for using credit via channel other vise no problem   This type of manipulation is possible in case of textile product and railway parts where refund of inverse credit is not allowed  (Reply dt. 22/11/2017)