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GST Council likely to consider clearer framework to curb fake invoices

GST Council likely to consider clearer framework to curb fake invoices

GST Council likely to consider clearer framework to curb fake invoices GST Council in its meeting to be held during 28-29 June 2022, will possibly consider the plan to bring out more clarity on what actions to be taken against the entities which are involved in claiming Input Tax Credit (ITC), which has become a major source of issuance of fake invoices.

Over 6,700 cases have been seen with the Centre and the State, and over 650 persons have been arrested since November 2020.

Fake ITC demand of over Rs. 50,000 Cr has been detected, also with the recovery of Rs. 2,400 Cr.

More than 20,000 fake GSTN’s have also been rooted out.

Due to the above, clarification on the demand and the penalty provisions relating to the transactions involving the fake invoices applicability has been sought by the Officers and the Businesses.

As recommended by the GST Council, the clarification aforesaid is to be provided in form of FAQs.

As per an official, clarification to be provided in three scenarios:

I.    Issuance of tax invoices by one registered person to another without any supply?

  • No demand could be made as there is no supply;
  • But penal actions could be taken against the person issuing invoice.

II.    Registered entity avails ITC on basis of fake invoice, without any underlying supply

  • The registered person could be liable for:

a.    Demand & recovery of the said ITC;
b.    Interest could also be levied, along with penal actions.

III.    Issuance of fake invoice by one registered entity to another, & ITC then further passed on to another registered entity

  • Second entity could be liable on account of the following:

a.    Availing of ITC fraudulently; &
b.    Issuing fake invoice.

Source: The Hindu Business Line
 

 

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