Income tax liability on non genuine sale invoice

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P.R. Bhupal Reddy

Manager Finance & Accounts

47 Points Posted on 05 March 2013

Dear Seniors,

i am working in a private limited company (Distributers / Retailers) and our company wants to genarate some non genuine sale invoices just for the sake of customer benefit.

I know, if we raise any sale invoice we have to pay sales tax accordingly and now, i would like to know any other liabilities for generating non genuine invioce and details are as the below.

01. Item wise Sale invoice generaiton without any purchase invoice

02. Actual purchased item is "A" and against the same item generate some "X " item sale invoice.

please advise me in this regard.

Replies (2)

Mihir

Wealth Manager

5358 Points Posted on 05 March 2013

It will impact your sales register, debtors statement, sales tax liability, inventory statement, and eventually your profitability as well since the company will not receive actual payment against the invoice raised, and that portion will have to be written off subsequently. That surely must be a very important customer.