Hawala dealer -

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2014 I had recd. notice from st for disallowance of input tax credit for company as hawala dealer. Vendor whom I used to buy goods had valid vat tin. Vendorgot his vat tin cancelled but still continued to do business with everyone. Now, he has been declared as hawala dealer & we have got in to trouble for all the goods procured after his cancellation date. As purchaser how can i do audit of the vendor for every invoice whether his regn. is active or cancelled.

I have heard that this is just start now IT will also come and ask for disallowance + interest & penalty. Is there any way where I can avoid this.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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27 July 2014 The law states that any input of VAT or ST is allowable only when the collector of such taxes pays to the govt.If it is found later that a bogus dealer has collected tax(VAT/ST) unauthorisedly he can be sued in a court. You can also demand such irregular collection to be refunded from the dealer.Here the ST/VAT departments have power to act on the basis your invoice as evidence to do inspection,audit or assessment, and recover such all wrong collections forcibly.If it is recovered so,you need not be penalised again.When such an action is initiated,recovery from you can be kept under suspense till that procedure is completed successfully/or dropped.....mjk

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Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2014 Sir, I totally agree with your point. For carrying out the process explained by you, I need some expert person's help and guidance. I believe you are located in Karnataka. Pls. advice if you can help me with us or know of any Senior expert like who is located in Mumbai and is doing such consultancy. Thanks in advance for your great help.

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MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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28 July 2014 Mr Author:
Through internet I have come across M/s NikhilKaushik and associates,a CA firm in Mumbai.I contacted them on your problem. They have agreed to take up your case. You may contact them over phone No9699814106 or e-mail at ca.nikhilkaushik@gmail.com.Pl inform me on the progress.....mjk