There are many fraud including GST fake invoicing which mean claiming input tax credit Fraudulently & claim refund against Goods and Service Tax. The issue of fake invoicing has a serious impact on our economy which is not impact now but impact in long run. The cases of GST fake invoices fraud are making hit on government pocket in COVID – 19 Pandemic when the Government is already struggling with low revenue collection .
Firstly know the meaning of fake invoices : when a registered person issues a tax invoice without actual supply of goods or services or payment of GST then such invoice is fake invoices And this is also known fake invoicing fraud. Taxpayer is not issued GST fake invoice for only taken input tax credit but issued for many reasons which involves:
- Availment of fake input tax credit on fake invoices by buyer.
- To do money transffer without money movement
- Avoid Goods & service tax , Income tax & transfer funds from companies
- For Obtaining loan from bank by showing high figures in books
- To claim GST refunds for exporters
It is very important to find out the generator & the users of fake invoices. For findout the generator & the users of fake invoices following steps is followed by GST authorities:
- Multiple registration on one pan & one address given on GST portal while taking registration
- Wrong & fake address details
- Some common registration details like: email, mobile no, address, authorized signatories , promoters for multiple gst no
- Find out the mismatch between firm declared & volume of goods delivered to buyer at the time of physical verification
- Find out the mismatch between volume of goods & eway bill generated
After finding out generator and user of fake invoices, GST authorities investigate the actual movement of goods with fake invoices and gather information of fake invoices.
Final decision taken by GST authorities after investigation for both supplier as well as buyer.Once the fraud is proved authorities take following actions:
- Cancellation of GST registration
- Input tax credit which is availed on behalf of fake invoices to be recovered.
- GSTIN of such supplier are stop for generating many more fake invoices and this action impact on those buyer who take credit on fake invoices
For minimizing the fake invoice fraud the government took a great step for avoid this fraud i.e.. insert an Input tax credit statement which is called 2b, implementation of e- invoicing & planning for more action to be taken .