GST Evasion of ₹40,000 Crore from Fake Invoicing & ITC Claims
Headline on front page of Economic Times today.
Tax authorities have detected GST evasion of ₹40,000 crores in over 5700 cases in a year largely on account of fake invoices and fraud input tax credit claims.
This may be just a tip of the iceburg. The CGST Act has a loop hole for GST fraud named Input Tax Credit (ITC). Smart businessmen are taking advantage of ITC to collect crores of rupees from government.
We have brought this to the attention of government through Local Circles and requested the amendment to GST law to remove provision of ITC. But instead of removing ITC the process for claiming ITC has been made more complex.
It is high time government removes ITC and announces new GST rates without ITC.
The GST rates without ITC could be:
a) 0% for exempted goods & services
b) 5% for all types of goods & services except Luxury goods
c) 10% for Luxury/Sin goods & services
All businesses should register under GST without any limit on annual turnover.
The suggested change will make GST a good and simple tax as was envisaged by PM. more
Tax authorities have detected GST evasion of ₹40,000 crores in over 5700 cases in a year largely on account of fake invoices and fraud input tax credit claims.
This may be just a tip of the iceburg. The CGST Act has a loop hole for GST fraud named Input Tax Credit (ITC). Smart businessmen are taking advantage of ITC to collect crores of rupees from government.
We have brought this to the attention of government through Local Circles and requested the amendment to GST law to remove provision of ITC. But instead of removing ITC the process for claiming ITC has been made more complex.
It is high time government removes ITC and announces new GST rates without ITC.
The GST rates without ITC could be:
a) 0% for exempted goods & services
b) 5% for all types of goods & services except Luxury goods
c) 10% for Luxury/Sin goods & services
All businesses should register under GST without any limit on annual turnover.
The suggested change will make GST a good and simple tax as was envisaged by PM. more
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Some business people/traders are evading GST. More foolproof system needs to be evolved. This i am saying with personal experience.Business man says to customer if you ask for bill rate of item is this or else the rate is less.Customers invariably get tempted. Utter unethical business.System must be ruthless to deal with such unscrupulous business people Jai Hind.. more
Feb 15
Input Tax Credit is not a LOOPHOLE. It is a very basic/integral part of the GST law without which, GST law is makes no sense. Misuse of any system is not because of the law, but because of two very simple factors: (a) The cost of evasion is much lower than the tax itself and (b) There are several duty and classification issues which are affecting competitive selling. This is another reason why people fool around. The only solutions to this problem is i) Reduce plethora of tax rates and exemptions ii) Keep the law simple iii) Educate and inculcate a culture of charging tax iv) Making compliance very simple v) Understanding that every invoice is not fraud. We also have many simple people who dont know every change made to GST law every other day. The law needs to be stable for at least six months at a time. vi) Government should play fair and refrain from unjust enrichment. more
Jan 21
Whatever one may say for or against Modi Govt., the ground reality is that there is a vast improvement in the lives of millions of people of our country, in one way or other, during the past seven years as compared to the preceding period of post independence of the country. In case there was any meat in the alleged misdeeds of Modi Govt. I am sure the opposition would have created havoc in the country. more
Jan 02
There are shops which ask " do you want a bill", 'Are you paying in cash?". And there is a big hospital near my house which accepts only cash for certain consultations. GST officials need to catch them, posing as commen citizens. more
Jan 02
Many are escaping GST implication, resorting to Fake invoices even more
Jan 02
