The Government of Tamil Nadu on September 13, 2022 has issued Clarification on the issues relating to applicability of demand and penalty provisions under the Tamil Nadu Goods and Services Tax Act, 2017.
The following has been stated namely: -
• Where a registered person “A” has issued tax invoice to another registered person “B” without any underlying supply of goods or services or both such an activity does not satisfy the criteria of “supply”.
• Where a registered person “A” has issued tax invoice to another registered person “B” without any underlying supply of goods or services or both. ‘B’ avails input tax credit on the basis of the said tax invoice. B further issues invoice along with an underlying supply of goods or services or both to his buyers and utilizes ITC availed on the basis of the above-mentioned invoices issued by ‘A’ for payment of his tax liability in respect of his said outward supplies. In such a case B shall be liable for the demand and recovery of the said ITC, along with penal action as well as applicable interest.
Please refer to the notification for further clarification provided.
[Circular No. 14/2022 – TNGST]
