'X' submitted a technical bid for suppy of BATS to a society controlled
by Govt of AP. One of the terms included by 'X' is that invoice will be
done directly by his principal and payment will be made to 'X'.'X' also
enclosed a letter from one of his principal authorising him as a
distributor to quote and contract on their behalf. 'X's' bid being the
lowest was accepted and later on a rate contract was entered into. In
the rate contract, there was no mention about payment to principals but
it was stated rate quoted my 'X' being the lowest was accepted and
having accepted the tender, it is decided by both parties to enter into
late contract. Now the authority refuses to accept the invoices by
'X's's principals. This arrangement was basically to save VAT/CST to
the tune of 16%. 'X' made this clear in his correspondance. I request a
frank opinion whether 'X' can insist for acceptance of the invoices by
his principal and payment to 'X' especially when consent is given by
'X's' principal. Does the above term constitute any avoidance of tax or
is it valid tax saving
