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)  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: