Written by Aanchal Magazine
| New Delhi |

Updated: February 2, 2020 10:59:02 am


The authorities has additionally proposed to levy penalty on an individual, if there’s a false entry or any entry has omitted to evade tax legal responsibility. (Representational Image)

In a transfer which might additional tighten the noose on these committing frauds below the Goods and Services Tax (GST) regime, the Union Budget for 2020-21 has made the fraudulent availment of input tax credit with out invoice or invoice a cognizable and non-bailable offence. While the Central GST (CGST) Act covers those that interact in faux invoices or round buying and selling, this transfer will assist the GST authorities to deliver to e-book those that challenge invoices with out truly finishing up any enterprise.

This class has been added to the prevailing non-bailable, cognizable offences below the Act. At current, Section 132 of the CGST Act treats provide of items and companies with out issuance of any invoice, issuance of any invoice or invoice with out provide of items or companies, assortment of tax however non-payment to authorities as non-bailable and cognizable offences.

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At a time when the federal government’s revenues from GST have slowed, with the revised estimates for 2019-20 for CGST falling brief of the unique goal by Rs 12,000 crore and for cess by Rs 11,016 crore, stricter motion on such frauds would assist the federal government to plug income leakages in absence of a foolproof on-line returns matching system.

“…several cases of fraudulent input tax credit (ITC) claim have been caught by the GST authorities. In these cases, fake invoices are obtained by suppliers registered under GST to fraudulently claim ITC and reduce their GST liability. These invoices are found to be issued by racketeers who do not actually carry on any business or profession. They only issue invoices without actually supplying any goods or services. The GST shown to have been charged on such invoices is neither paid nor is intended to be paid. Such fraudulent arrangements deserve to be dealt with harsher provisions under the Act,” the Budget paperwork acknowledged, including that these modifications could be efficient from April 1.

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The authorities has additionally proposed to levy penalty on an individual, if there’s a false entry or any entry has omitted to evade tax legal responsibility. “It is also propose to provide that any other person, who causes in any manner a person to make or cause to make a false entry or omits or causes to omit any entry, shall also pay by way of penalty a sum which is equal to the aggregate amounts of such false entries or omitted entry,” it stated.

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