GST Fake Invoice: Two years after the implementation of a nation wide common goods and services tax (GST), the Central Board of Indirect Taxes and Customs (CBIC) has started the enforcement in an earnest manner. Tax officials are cracking down on those businesses that have been issuing fake GST invoices to claim input tax credit (ITC) under the GST mechanism.
In this case, the officials of the Central GST’s North Delhi official busted a racket of issuance of fake invoices without actual supply of goods and services. Two individuals, Asrar Akhtar and Vikas Singh were arrested by the department and presented before the chief metropolitan magistrate (CMM), New Delhi at Patiala House Courts who remanded them in 14 days judicial custody, said the ministry of finance.
The accused and their associates were found to be operating 19 fake firms created to facilitate fraudulent Input Tax Credit (ITC) claims.
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“Prima facie fraudulent ITC of about Rs 25 crores has been detected to have been passed on using invoices involving an amount of Rs 137 crores,” said the ministry of finance in a statement.
The GST has been designed to avoid the cascading of taxes, it means, the government offers input tax credit for the taxes already paid during the earlier stages of production of a product. However, this is the provision that has been most misused. Businesses and traders have been found involved in the cases of generating and issuing fake GST invoices to fraudulently claim input tax credit (ITC) under the GST.
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The modus operandi of these individuals and their associates Sabban Ahmed and Arif involved issuance of fake invoices of firms registered across Delhi NCR from a premise in Azadpur, Delhi.
Voluminous incriminating documents such as fake invoices, diaries, letter-heads, rubber stamps of fake firms, cheque books, transporter’s consignment notes as well as electronic devices have been recovered. Investigations are underway to identify other individuals and firms involved in this racket.
“The accused have committed offences under the provisions of Section 132(1)(b) of the CGST Act 2017, which are cognizable and non-bailable under Section 132(5) and punishable under Section 132(1)(i) of the said Act,” said the ministry of finance.
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