TaxTMI 
TaxTMI 
Dear Sir,
Can VAT officer deny Input tax credit since the Vendor has not remitted the VAT amount to the Govt.
regards
P S Satyanarayana
Denial of VAT input credit
20 Feb 2013 
9 Replies 
11804 Views Asked by
Input tax credit protection upheld for innocent purchasers; denial only when fraud, collusion or connivance is proven.
Section 8(3) and Rule 20 require a purchaser to produce Form VAT C-4 and allow the authority to verify it before granting Input Tax Credit, but the Punjab & Haryana High Court held that an innocent purchasing dealer who produces a genuine certificate cannot be denied credit solely because the selling dealer failed to deposit tax, unless fraud, collusion or connivance with the seller is proved; purchasers retain remedies against defaulting sellers and may claim refunds if sellers later pay. (AI Summary)
Section 8(3) and Rule 20 require a purchaser to produce Form VAT C-4 and allow the authority to verify it before granting Input Tax Credit, but the Punjab & Haryana High Court held that an innocent purchasing dealer who produces a genuine certificate cannot be denied credit solely because the selling dealer failed to deposit tax, unless fraud, collusion or connivance with the seller is proved; purchasers retain remedies against defaulting sellers and may claim refunds if sellers later pay. (AI Summary)