The respondent claimed input tax for supplies received between July and December 2014 and consequently claimed input tax on them. The CDT rejected the claim on basis that the supplier for the goods Hardishi Limited had been profiled for issuing illegal ETR receipts. Further, records of the deliveries from the respondent indicated that one delivery of 5.2 tonnes was made by a saloon car, Nissan Sunny.
The contention was whether it was enough to claim input tax on the basis of having ETR invoices. The Tax appeals tribunal was of this opinion, a decision that aggrieved the appellant.
In ruling over the matter, the high court highlighted the provision of Section 17(1) of the VAT act which indicates input tax is claimable but to the extent that the supply or importation was made to make taxable supplies. The basis of the refund was not just evidence of payment of the claimed VAT, but proof that there was a taxable supply or importation for which the tax was paid and therefore input tax was claimable.
The burden of making this proof was shifted to the taxpayer but the documents produced could not proof that any supplies had been received.
The input tax claim was not allowed by the court.
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