Govt to take more Measures to Control Fake Invoice | ITC Laws to become more strict

More measures under the Goods and Services Tax (GST Act) are being considered by the Finance Ministry to combat the malice of bogus invoices in GST. In the National Capital Region alone, tax sleuths have discovered over 60 fictitious entities involved in the fabrication of fake invoices totaling over Rs 800 crore.

If the amount exceeds Rs 5 crores, Section 132 of the CGST Act 2017 makes issuing of an invoice or bill without delivery of goods or services, as well as unlawful availing or use of Input Tax Credit, a cognizable and non-bailable offense. According to the law, a registered person must disclose his supply on return form GSTR 1 and pay his tax responsibility on return form GSTR 3B. This enables the recipient to claim an input tax credit (ITC) for supplies that his suppliers have disclosed in their GSTR-1 and for which tax has been paid.

GST Department issued Clarifications regarding Issues relating to Incorrect Reporting of GSTR-1 and ITC

Move to Curb Fake Invoices

The most recent move to combat the threat of fake invoices went into effect on January 1 this year, when it was announced that if a monthly filer has not filed the GSTR-3B for the previous month, he or she will not be allowed to file the GSTR-1 for the following month until the GSTR-3B for the previous month is filed. GSTR 1 and GSTR 3B for past months must be filed by the 11th and 20th days of each month for monthly fliers.

The current indication is that the endeavor will begin within the month, i.e., once the GSTR 3B due date has passed. In a recent news conference, Revenue Secretary Tarun Bajaj gave this indication in response to a query about how to combat false invoicing. He indicated that, following the measure to prevent sequential filing, work is underway to act considerably more quickly, with details of such action to be announced soon.

Source: The Hindu Business Line