1. The Authority shall reject the deduction of recoverable input tax if it is established that the supply in respect of which the deduction is claimed was part of a supply or a chain of supplies connected with tax evasion, and that the Taxable knew of such connection at the time of deducting the recoverable input tax. 2. The Authority may reject the deduction of recoverable input tax if it is established that the supply in respect of which the deduction is claimed was part of a supply or a chain of supplies connected with tax evasion, and that, having regard to the circumstances of the supply, the Taxable Person should have known of such connection. 3. For the purposes of applying the provisions of Clause (2) of this Article, a Taxable Person shall be deemed to have been required to know that the supply was part of a supply or a chain of supplies connected with tax evasion where the Taxable Person failed to verify the validity and integrity of the supplies received prior to deducting input tax, in accordance with the measures, procedures, and conditions determined by the Authority in this regard.
Interpretation and application must be checked against the official text and current version.