The director general of goods and services tax intelligence (DGGI) has detected about 8,000 cases of fraudulent input tax credit claims and is in the process of sending out notices to the entities involved. In some cases, the input tax credit (ITC) was claimed on the basis of suppliers whose GST registration was already cancelled or were found to be shell firms. In such cases the law restricts the claim of input tax credit only to the extent of input tax credit appearing in the GSTR-2A. GSTR-3B is basically a summary return of outward supplies and input tax credit claimed along with taxes paid. Authorities have now started the second phase of the exercise in which they will go after entities that availed fake invoices from the fraudulent supplier companies.

Source: Economic Times August 06, 2023 05:57 UTC