Fake ITC claims detection by central GST officers up 51%
The Central Board of Indirect Taxes and Customs (CBIC) has uncovered Rs.36,374 crore in fraudulent Input Tax Credit (ITC) claims across 9,190 cases in the Financial Year 2023-24, Minister of State for Finance Pankaj Chaudhary revealed in a written response to a Lok Sabha query on Monday.
According to the figures provided, there has been a steady increase in the detection of such fraud cases, rising from 5,966 in 2021 to 7,231 in 2022-23.
To combat ITC fraud, the government has introduced new measures, including a rule under the Central Goods and Services Tax (CGST) Act requiring risk-based biometric Aadhaar authentication for registration applicants deemed risky based on data analytics.
An amendment to the CGST rules now mandates physical verification for high-risk cases, even if Aadhaar authentication has been completed. Additionally, restrictions have been implemented on claiming Input Tax Credit (ITC) for invoices and debit notes that are not included in the supplier’s statement of outward supplies.
There are some measures introduced to combat ITC frauds:
- Filing Form GSTR-1 is now mandatory before submitting Form GSTR-3B for each tax period, and the filing of Form GSTR-1 must be done sequentially.
- Beneficial owners can now face penal action and prosecution similar to that of the actual supplier or recipient if a supply is made without an invoice, an invoice is issued without a supply, or if excess ITC is availed or distributed.
- Section 83 of the CGST Act has been amended to allow provisional attachment of property in cases where any person has retained benefits from fraudulent transactions.
- Non-compliant taxpayers will face restrictions on generating e-way bills.
- The threshold limit for issuing e-invoices for B2B transactions has been reduced from Rs.10 crore to Rs.5 crore, effective August 1, 2023.
- Data analytics will be used more regularly to identify and track risky GST registrations and detect tax evasion.
Besides, the change in rules requires furnishing a bank account as a part of the registration process to be in the name of the registered person and obtained on the PAN of the registered person and also linked with Aadhaar in case of proprietorship firm and that the details of bank account will be required to be furnished within 30 days of the grant of registration or before the filing of GSTR-1, whichever is earlier.
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36376 Cr. is not a small amount. The scamsters of this type need to be put through the CHAKRAVEW, a one way entry including their supporters. This type of money launderers if not acted against will be responsible for the laundered money going to drugs, human trafficking and terror funding, knowingly or otherwise, and lead the country in the Grey list FATF. The objection to CHAKRAVEW in the LOKSABHA is understandable from people who have only learnt how to steel money while in the wombs of their mothers, the new breed on ABHIMANUs. Very unhappy about the HALWA made with DESI COW MILK.