Published Online:October 2024
Product Name:The IUP Journal of Law Review
Product Type:Article
Product Code:IJLR041024
Author Name:Fake GST Invoices: What Needs to Be Done
Availability:YES
Subject/Domain:Law
Download Format:PDF
Pages:35-44
Input Tax Credit (ITC) is one of the essential features of GST, as it eliminates the cascading effect of taxation. However, in recent times, fraudulent activities to dupe government authorities through tax evasion are rising rapidly. Issuing invoices without the concomitant supply of goods or services is one of the most dangerous and widely used methods to tweak the provisions of GST laws and avail undue or fake Input Tax Credit. This paper aims to analyze the workings and motives behind such invoices. Most importantly, this paper focuses on the current contentious legal issues arising out of post-detection steps taken by the departmental authorities, wherein even a bona fide taxpayer may face actions due to the fault of another party in the transaction. The contentious issues discussed in the present paper are: difficulty in getting bail, denial or reversal of Input Tax Credit, cancellation of GST registration, and attachment of property. The paper focuses on understanding the numerous provisions of the Central Goods and Services Tax Act, 2017, and the Income Tax Act, 1961 under which offenders can be tried. Lastly, the paper provides ways to tackle the fraudulent activities through new-age technologies, such as artificial intelligence and data analytics.
The indirect taxation structure of India underwent its most significant reform with the implementation of the Central Goods and Services Tax Act, 2017, the State Goods and Services Tax Act, 2017, the Integrated Goods and Services Tax Act, 2017, and the Union Territory Goods and Services Tax Act, 2017 (CGST Act, SGST Act, IGST Act and UTGST Act).