Payment towards bankrupted party

[yujin kim]

Dear sir

We have paid some amount towards bankrupted party.

In our company if we have to pay tax, then we receive proper tax invoice written supplier's TIN no.

and we are checking whether this TIN no is available from sales tax website.

After we paying tax, we found this party is bankruptcy and they didn't do VAT return properly.

In this situation, can we get the benefit of paid VAT refund(CENVAT credit) ? and we are not sure which party we have to pay tax, and for receiving proper tax refund, which action we can do?

In conclustion, after paying tax, we found supplier is not available, or not registered in vat no, so vat no is not available. then how  can we get te tax benefit which is we've paid already.

AI Summary

Company Can Reclaim VAT Paid Even If Supplier Goes Bankrupt; No ITC Denial Without Collusion, Says Precedent. A company paid VAT to a supplier who later declared bankruptcy and failed to file proper VAT returns. The company inquired about reclaiming the VAT paid. The response referenced legal precedents, highlighting that sales tax collected by a dealer acts as an agent of the state, and purchasing dealers should not be denied Input Tax Credit (ITC) if the seller fails to deposit the tax, unless collusion is proven. The judgments cited clarify that liability should not fall on the purchaser if the seller defaults, protecting innocent parties from being penalized for the seller's non-compliance.