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Introduction

Since input tax is, inter alia, VAT on the supply to a taxable person of goods or services¹, it follows that the following conditions must be met for input tax credit to be available:

1. Ìý

   •ÌýÌýÌýÌý a supply must have taken place, and

2. Ìý

   •ÌýÌýÌýÌý the input tax credit must be claimed by the taxable person to whom the supply is made

In addition:

1. Ìý

   •ÌýÌýÌýÌý the supply must be chargeable to tax at the rate claimed²

2. Ìý

   •ÌýÌýÌýÌý the claimant must hold satisfactory documentary evidence of his entitlement to input tax credit³

These conditions are discussed under the headings below.

Requirement for a supply to have taken place

No entitlement to an input tax credit can arise unless the payment made relates to a supply of goods or services, even if a VAT invoice is issued. Thus, credit for input tax has been denied where the payment was compensatory and did not involve a supply⁴,