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 :: ARTICLES ON INPUT TAX CREDIT IN VAT :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: VAT Audit :: empanelment :: due date for vat payment :: form 3cd :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: TDS :: ACCOUNTING STANDARDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT RATES :: cpt
VAT (Value Added Tax) »
 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
 Delhi cuts VAT on ATF to 1% for regional flights; other states to announce the same soon a
 Shops cannot charge VAT on discounted items: Consumer forum
 Delhiites have to pay lowest taxes as AAP govt announces cuts on VAT on various items
 Tamil Nadu minister justifies VAT hike on fuel
 State Government urged to withdraw hike in VAT on petrol, diese
 High VAT may encourage illegal trading

Duplication in input tax credit major source of misuse in VAT
January, 03rd 2011

Value Added Tax is widely believed to be a tax which is not so evasion prone because of the audit trail that it creates. However, this audit trail is not so much easy to pursue mainly because of very voluminous records of input credit that are to be checked. Unless it is supplemented by action on the basis of intelligence reports, merely routine check of documents do not reveal the misuse of input tax credit resorted to by the manufacturers and dealers. The occurrence of frequent misuses led to the Central Board of Excise and Customs (CBEC) to tighten the check as well as to introduce the measure of debarring the manufacturers from availing of this system of input tax credit for a certain period.

In a recent case (NCR Corporation Indian Pvt Ltd vs. Member, CBEC -2010(259)ELT663(Mad.), the Madras High Court has upheld that the duplication in the entry of credit of nearly Rs 2 crore was a deliberate act which attracted the punishment as in the notification No.32/2006 dated 30-12-2006. The High Court noted that this notification was issued to prevent the violation of such misuse and the manufacturer could not take the plea that it was just a mistake due to a very large number of input tax credits taken per month. This mistake was not detected by their internal audit though the audit was already completed. It was detected by the Department on the basis of intelligence report. The notification No.32/2006 has laid down certain procedure which is quite elaborate so that ultimate decision is taken by the CBEC. If the CBEC is convinced that the manufacturer is knowingly involved in committing the offence of taking the same credit twice or similar fraudulent actions for evading duty, it can debar the manufacturer from availing of the facility of Cenvat Credit for a certain period and also from availing of the facility of paying duty on a monthly basis. In that case the manufacturer has to pay the duty on a daily basis. In this case when an order was passed by the CBEC to take action under the above notification, the action was upheld by the Madras High Court.

For more information click here

Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Internet Marketing Website Marketing Internet Promotion Internet Marketing India Website Marketing India Internet Promotion India Internet Marketing Consultancy Website Marketing Consulta

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