Negligent Vendors and VAT Credits: Can Buyers Still Claim Their Input Tax?

Dispute over VAT Input Tax Credits: PT. MI Decision (PUT-012946.16)

The dispute over VAT input tax credits due to "non-existent" confirmation answers has resurfaced in the case of PT. MI (PUT-012946.16). The core conflict began when the DGT revoked the Petitioner's VAT credit rights because the seller had not reported the invoices in their tax returns. The DGT argued that without the seller's report, the tax was deemed not to have entered the state treasury, thus failing the material requirements for credit under Article 13 paragraph (5) of the VAT Law.

Proof of Money & Goods Flow and Board of Judges' Resolution

However, the Taxpayer provided a strong defense by presenting undeniable evidence of money and goods flow. During the trial, it was revealed that all payments, including VAT, had been transferred through the banking system. The Board of Judges, in their resolution, emphasized that the buyer should not bear the burden of the seller's administrative errors. The right to credit is a constitutional right of the buyer who has paid the VAT.

Implications for Good Faith Buyers

This analysis shows that the existence of valid payment evidence (cash flow) is the key to winning against negative confirmation corrections. The implication of this decision strengthens the position of Taxpayers as good faith buyers to retain their rights despite problematic vendors.