The GST -Intelligence Unit has unearthed a racket which used fake bills to claim input tax credit worth Rs 450 crore, the Financial Express reported today. This is considered as the biggest GST scam so far.
The government has started issuing summons to those traders or business houses that produced counterfeit bills to claim tax credits asking them to provide evidence of transactions – sale/purchase – truthfully and produce the documents and record for the examination.
Reportedly, traders buy fake bills which enable them to claim input tax credit on the supply which never happened.
Earlier this year in February, the Haryana Excise and Taxation Department lodged a police case against a Gurugram-based firm for acquiring fraudulently an input tax credit of Rs 50.34 crore.
Providing the details of the case, Additional Director General, DGGI Jaipur, Rajendra Kumar said: “The accused generated bogus invoices through companies that existed on papers for availing input tax credit. The goods were not issued by the firms”.
Considering the frequency of input tax credit frauds, invoice matching mechanism will be launched from this July as per the recommendation of the GST Council.
According to the Finance Minister Arun Jaitley, the invoice matching mechanism will curb the possible tax evasion on account of fake invoice frauds.
Last year, the Government received transitional credit claims worth Rs 65,000 crore. Following this, the Central Board of Excise and Customs asked its officials to verify all transitional credit claims for more than Rs 1 crore.
