While the government is trying to boost revenue by increasing monthly GST collection target for the remaining part of the year, frauds related to fake GST invoices have been consistently giving birth to new troubles. The Anti-Evasion wing of CGST Delhi South Commissionerate today unearthed yet another case of fake invoicing and GST fraud involving fake invoicing of Rs 1,600 crores and tax evasion of Rs 241 crores, said a statement by the Ministry of Finance. This time, the fraud was related to a provision of inverted duty structure, which is an arrangement where raw materials have a higher duty, while the finished products attract lower duty.
The investigations have also found a well organised racket of creating bogus firms, issuing fake invoices and bogus e-way bills to generate and encash tax credits. The racketeer had created several firms on the basis of unauthorised access to identity documents of various persons.
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Earlier this week, the findings disclosed by states and other stakeholders to the Committee of Officers revealed that the central and the state governments together are facing Rs 20,000 crore revenue loss due to refunds claimed by companies on account of flaws in the GST rate structure. And these types of frauds act as a double-edged sword, giving additional scars to the revenue collection.
Meanwhile, GST Council has introduced the ‘E-invoicing’ facility in a phased manner for reporting of business to business (B2B) invoices to GST System, starting from 1 January 2020 on a voluntary basis. Along with the other benefits, this facility is also believed to check tax evasion.
“There is no doubt that the process of E-invoicing will help the global economy by curbing tax evasion as it enables pre-populating of GST returns and e-way bills with the e-invoicing details, said Rajat Mohan, Senior Partner, AMRG & Associates.
GST Network has also developed a system of identifying potential areas of tax evasion by generating ‘Red flag alerts’, after which, the information is shared with the taxmen for appropriate actions. However, the cases related to fraud are regularly spotted, pinching the government’s indirect tax collection.
Source: Financial Express
