Liability if the Word 'TAX' is not printed on the 'TAX Invoice'

[Sukesh Gupta]

'A' a manufacturer in Delhi issues an Excisable Invoice ( for claiming MODVAT Benefit) to another Manufacturer 'B' in Delhi who is also Registered With EXcise .The Format of the Invoice is as prescribed by Excise Department ie Invoice bears Tin No,ECC Code,PAN etc But the word 'TAX' is not put before 'INVOICE'

How serious is this Omission? Can 'B' not claim VAT Credit for VAT amount Charged by 'A'

[YAGAY andSUN]

Dear Sukesh,

The law is very clear on this aspect that Input Tax Credit can be claimed only on the strength 'Tax Invoice'. Department may levy penalty for non-compliance in this regard to the extent of ₹ 500/- per Invoice.

Regards,

Team YAGAY and SUN

(Management and Indirect Tax Consultants)

[Mahir S]

"A" should be advised to issue new invoices accordingly..

As for the invoices already issued, the word TAX should be affixed by a rubber stamp and same should be signed/initialed by "A". Thereafter VAT Credit may be taken by 'B' AFTER written intimation to the department about the changes made in the invoices.

Thereafter, it is upto the department to decide on the said issue.

[Sukesh Gupta]

Are the Rules and Regulations so vague and arbitrary and one is solely at the mercy of the authorities when there is no evasion of Tax ?

AI Summary

Tax Invoice requirement: omission of the word tax can invalidate input VAT credit absent corrective invoice or departmental approval. Omission of the word Tax Invoice can prevent a recipient from claiming input VAT credit because credit is claimable only on the strength of a Tax Invoice; tax authorities may impose a fixed penalty per defective invoice. Recommended corrective steps include issuing corrected invoices or affixing and signing the missing word and informing the department, but acceptance of such corrections and allowance of credit are subject to the tax authority's discretion.