An activity may be unlawful and still ‘within the scope’ of VAT. If the activity has no legal counterpart, it is probably ‘outside the scope’ of VAT.

In Witzemann v Hauptzollamt München-Mitte (Case C-343/89) [1993] BVC 108, the ECJ ruled that VAT and customs duties were not chargeable on the importation of forged currency into the EU. However, an importation may be distinguished from a supply. The Advocate-General (Jacobs) said at p. 110, para. 10, of his opinion:

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