Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ACCOUNTING STANDARD :: due date for vat payment :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: list of goods taxed at 4% :: cpt :: TDS :: VAT RATES :: ACCOUNTING STANDARDS :: VAT Audit
VAT (Value Added Tax) »
 Income Tax Appellate Tribunal Bangalore Banches Bangalore 'A' Bench DB Case Causelist for The Week from 22-05-2017 To 25-05-2017
 Amendments in Second schedule appended to Delhi Value Added Tax Act, 2004
 Haryana govt exempts solar devices from VAT net
 Court rules out VAT on Paradise equity transfer
 VAT gone but riddle of derivatives traded on commodity exchanges lives on
 Rule 2(L) Of Cenvat Credit Rules, 2004 Amended
 Haryana govt exempts solar equipment from VAT
 AP to push for same benefits under GST for VAT exempted goods
 Andhra Pradesh to push for same benefits under GST for VAT exempted goods
 Petrol prices set to rise in Goa with increase in VAT
 Payment systems to remain open on all days from March 25, 2017 to April 1, 2017

European Court Rules On VAT Deductions And Supply-Chain Irregularities
December, 13th 2012

The European Court of Justice has issued a preliminary ruling in the case of value-added tax (VAT) deductions for supplies that a company paid for, but which tax authorities believe were not in fact received.

Tax authorities in Bulgaria had refused deductions made by a company named Bonik for the supply of wheat from two suppliers, and the Administrative Court in Varna referred a number of questions to the ECJ.

Tax authorities investigated Bonik in 2009, including checks on two suppliers and in turn on their three suppliers. These checks were unable to prove that Bonik's suppliers had had sufficient quantities of wheat to supply Bonik; one of the suppliers was not found to be at its given address, and did not provide documentation asked for by the authorities. The authorities therefore concluded that the supplies had not been received by Bonik. The court in Varna, however, established that Bonik had paid properly-documented invoices submitted by the suppliers, and that Bonik appeared to have in turn made supplies of the same quantities of wheat. The authorities did not claim that Bonik had acquired this wheat from elsewhere.

According to the court in Varna, Bulgarian legislation does not make the right to deduct VAT conditional on proof of the origin of goods, but some Bulgarian courts and the tax authorities do require proof that preceding supplies have been carried out before the right to a deduction is allowed.

The ECJ was asked to consider questions around whether lack of supply is the same thing as tax evasion, and whether a customer’s right to make a VAT deduction should be affected by "fraud or irregularities" by other links in the supply chain. According to the ECJ's ruling, in order for the VAT deduction to be disallowed, there has to be "objective evidence that the taxable person knew, or should have known, that the transaction relied on as a basis for the right of deduction was connected with VAT fraud committed upstream or downstream in the chain of supply." In such a case, involvement in a transaction involving VAT fraud would make a company "a participant" in the fraud, whether or not it profited.

Whether Bonik indeed knew, or should have known, of such a connection is now for the court in Varna to determine.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Wholesale Silver Jewelry

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions