GST Show Cause Notices sent to Traders for Fake Invoices

Traders have received Goods and Services Tax (GST) Show Cause Notices (SCNs) from the Goods and Services Tax Department for issuing erroneous, fake, or fraudulent invoices based on data obtained through the Mera Bill Mera Adhikar Scheme.

The CBIC launched the Mera Bill Mera Adhikaar (MBMA) scheme to promote the generation of bills and invoices during transactions of sale or purchase. A campaign in support of the MBMA plan is presently underway to raise awareness about this effort.

GSTN is building a technical platform in partnership with its application partner, M/s e-connect Solutions Pvt. Ltd.

Officers are making purchases at different businesses and shops to scrutinize issued invoices. Officers send notices when invoices are found to be false or erroneous.

According to the Show Cause Notice issued under Section 122(1)(i) of the CGST Act, 2017, you, as a registered entity, have violated Section 31.

The charge involves the issue of incorrect tax invoices in violation of GST laws. In particular, improper or fake invoices were provided without the required assessment or payment of applicable taxes.

Examining invoices on the “Mera Bill App” portal revealed irregularities in the issued invoices.

The notices imply a penalty of Rs. 10,000 for both SGST and CGST, totaling Rs. 20,000.

Respond to this notice by explaining the reasons for non-compliance and the issuance of incorrect invoices.

Clarification or evidence is required to substantiate moves, preventing or reducing penalties.

The show cause notice received by an individual from the GST department is enclosed.

According to Section 31 of the CGST Act of 2017, a registered person supplying taxable goods shall submit a tax invoice specifying the description, quantity, and value of goods, the tax charged thereon, and such other particulars as may be specified.

According to Section 122 (1) (i) of the CGST Act, 2017, a taxable person who supplies any goods and services or both without issuing an invoice or issues an incorrect or false invoice about any such supply shall be liable to pay a penalty of Rs. 10,000 or an amount equal to the tax evaded, whichever is greater.

During a review of the bills submitted by the purchaser on the “Mera Bill App” portal that was issued, the following irregularities were discovered:

Taxable goods under the GST Act 2017 but did not provide a legitimate invoice under GST rules, instead issuing incorrect/ fake invoices (copies enclosed) without charging and paying tax. As a result, it is obvious that you willfully violated Section 31 of the CGST Act, 2017 and so committed an offence punishable under Section 122 (1) (i) of the CGST Act, 2017.

Liable to Pay as Under:

Penalty of Rs. 10,000 under SGST

Penalty of Rs. 10,000 under CGST

Total: Rs. 20,000

If you have any objections to the above-mentioned penalty, you may send your written submission, if any, via mail or in person to the undersigned’s office within one week without fail; in the event of non-compliance, an appropriate order will be issued without further notice.