The Supreme Court (SC) has set aside a Karnataka High Court order that allowed dealers to claim input tax credit (ITC) under the VAT regime by producing invoices and cheque payments.
The SC allowed tax authorities' appeal against the High Court judgment. It said a dealer claiming ITC has to prove beyond doubt the occurrence of the actual transaction” and the “actual physical movement of the goods".
It pronounced the order HC as “erroneous” and said that, “for claiming ITC, genuineness of the transaction and actual physical movement of the goods are the sine qua non and the aforesaid can be proved only by furnishing the name and address of the selling dealer, details of the vehicle which has delivered the goods, payment of freight charges, acknowledgement of taking delivery of goods, tax invoices and payment particulars etc.”
However, the SC added that while the tax invoice and cheque can be said to be proving one of the documents, it is not sufficient to prove the genuineness of the transaction.
It should be noted that e-way bills and e-invoicing under the GST regime can come handy to claim ITC in this regard.
“Though the ruling is under VAT, GST authorities may now ask for additional documents to substantiate input tax claims by placing reliance on the principles laid down in the ruling. However, apart from invoice and proof of payment, documents such as E-waybill and E-Invoice, could help in substantiating the genuineness of the transaction under the GST regime,” said Harpreet Singh, partner at KPMG India
No comments:
Post a Comment