Hi
Can anyone guide in below case?
Material was purchased having vat rate 12.50 e.g. Net 10000 Vat 12.5 1250 total invoice 11250
The above material was rejected fully due to some quality issues.
No input vat credit was availed since the material was not accepted.
The material was returned mentioning tax invoice.
Here the selling dealer had paid vat on sale and availed input credit based on our rejection tax invoice.
In case of purchasing dealer i.e. we have not availed any input credit and also not shown any transaction
in Form 704.
Now the dept has asked the selling dealer to pay the tax on input tax credit availed by them.
In both the case there is no double taxation but since input credit is not matched with us the liability has arise.
Kindly advise
Thanx in advance
