Purchases are not made but the bills aremade by supplier.

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Ruturaj (Querist)
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04 May 2013 Some MNCs in confectioneries have a policy of not selling there low end products (e.g. Rs. 5/- chocolates)to malls/ super markets. In case any perticular mall demands for such product then the distributor from the area sells those products to the malls but bills are shown to some other low profile shops whose vat tin number is known to the distributor; and the distributor accepts payment in cash.
That small shop is not at all aware about the deal or the bill made on his name.
Now the question is after scrutinising the accounts of the distributor, if vat tax officer asks explanation from the small shop that why he has not shown these purchases in his accounts and fines him what protection the shop owner would get?
How can he prove that he has not made those purchases.
Similarly many suppliers do the business on kachha chitti for six months and when the vat deadline approaches make few pakka bills at random in the name of some shops they know with there vat tin no. It may happen that they may show more purchases in the name of some shops. So the same question how should the shop owner prove that he has not made those purchases?

CA Alexandar Gazi

CA Alexandar Gazi (Expert)
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04 May 2013 Mr. Ruturaj,

A dealer under VAT is raising false bills on another dealer unedr VAT.

Your question is how the second dealer would prove that he was not a purchaser.

It is very easy to prove. You know, POD (prove of delivery) is very important. Only invoice and/or challan are not all, in case of this type of disputes, it is the selling dealer who has to prove that the goods were actually delivered to the purchasing dealer. Generally purchasing dealer or its authorised person make sign and stamp on the challan (" GOODS RECEIVED IN GOOD CONDITION"/ GOODS RECEIVED WITHOUT INSPECTION/GOODS RECEIVED")and delivered the copy to selling dealer. Unless this copy is with selling dealer how can he prove that goods were actually delivered.

Thanks,

Alexanddar Gazi

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