Bogus Sales Purchase

[Kalpessh Daftary]

Dear Sir,

As my company trade in Duty free transferable licenses in Maharashtra where 4% is VAT , above Duty free transferable licenses

1. We explain how this duty free transferable licenses are traded as it’s generated by the Exporter of the goods and if they can’t utilized against their import they sold to the importer at certain discounted price through broker or trader.
2. Duty free transferable licenses issue by Jt. Director General of Foreign Trade which comes under Ministry of Commerce and all Duty free transferable licenses had unique identification no i.e licences no. that identification of goods .
3. Duty free transferable licenses verified and utilized by Custom department which comes under Ministry of Finance.
4. Duty free transferable licenses details are available online from issue to utilize.

ITO issue us a notice that our purchase are bogus and from one of the trader ( in our chain ) say that he made only entry bt our sales and purchase also get VAT refund for the same transition

What we have to do

AI Summary

Company Accused of Bogus License Purchases Faces Tax Scrutiny; Seeks Guidance on VAT Refund Issue Under Investigation A company involved in trading duty-free transferable licenses in Maharashtra, subject to 4% VAT, received a notice from the Income Tax Office (ITO) alleging that their purchases are bogus. These licenses, issued by the Joint Director General of Foreign Trade, are traded when exporters sell them to importers through brokers if they cannot utilize them. The company is accused of making false entries, and one trader in their chain admitted to only making entries without actual transactions, yet the company received a VAT refund. The company seeks advice on how to address this issue.