A registered purchase of goods from another registered dealer two invoices value rs:1 lacs and same date dealer sales of goods to another registered dealer two invoices value rs:1 lacs.
question:
dealer above mentioned purchase and sale transaction same date fake transaction or non transfer goods transaction treatment in gst act
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Fake transaction or non transfer goods treatment
Replies (3)
Depends upon mode of transport and generation of Eway bill.
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This type of same-day purchase and sale, with identical invoice values and no clear movement of goods, can raise red flags under GST, especially if authorities suspect circular trading or tax evasion.
If there is no actual transfer of goods, it might be treated as a non-supply under GST unless documentation clearly proves the physical movement. Imagine issuing two invoices for a Patek watch without the watch ever moving — the tax authorities would definitely take notice.
It’s always safer to maintain proper transport records, e-way bills, and proof of delivery to avoid classification as a fake transaction.
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