Stop Penalizing Dealers on the Basis of Fake GST Billing

Due to a rise in bogus billing and fake GST, the experienced ones are expressing the concern for the innocent businessmen who have no involvement over these scams but still get penalised.

These businessmen had done an actual purchase with the traders who further got the purchase from anyone in the chain of people who have done scams. All the bogus and forged billing by the character and the businessmen has been sent the notice and forced to file the input tax credit (ITC) A complete guide for understanding the basics of input tax credit and it calculation with detailed examples under GST (Goods and Services Tax) India which they claimed. In between this, the traders who have made genuine buying and are not involved in scams are bound to pay ITC. the government and tax department will have to change the criteria of punishing the people who are not involved in any type of scams said by tax professionals.

“Under GST, fake and bogus invoicing has become a big issue. Every other day raids are conducted by central and state GST authorities to unearth these billing scams. In a large number of cases, there are instances where innocent industry, business houses are entrapped and have to suffer though they were not a party to any such scam. An example of such a case — suppose a trader (named B) located in Delhi possesses material but he does not have a bill of the same as he has procured the material in piecemeal from a number of small traders. He procures GST paid bill from some other trader or manufacturer (named A) located in Gujarat without receiving any material. Trader B supplies the material lying with him on his bill which has been issued on the basis of a procured bill to another trader (named C) located in Ludhiana. This trader C sells the material to the manufacturer (named D) located in Ludhiana, who avails ITC, uses the material for the manufacture of his final product, and pays GST Check out due dates of payment under GST for general and composition taxpayers in India. We have included penalty charges on late payment with interest on the final product after using ITC of purchased material and pays rest from his own pocket. In this case, the manufacturer D knows only about trader C. He has no link with trader B or A. Now when the investigation agencies of GST formations trap any of the above in the chain, they ask manufacturer D to reverse ITC, along with interest and penalty.”

“The investigating agencies are taking the help of Section 155 of the CGST Act, 2017 which provides that the burden of proving entitlement to ITC lies on assessee. In the above transaction, manufacturer D located at Ludhiana can ensure genuineness only of the immediate preceding trader C from whom he has actually purchased the material. The Government should come out with a provision to fix the liability of manufacturer D to check the genuineness of the transaction & authenticity of the supplier only up to his immediate preceding stage. There is another blunder in such transactions as the investigating agencies ask all the traders and the manufacturer in this whole chain to reverse ITC at their end.”

“The issue of innocent businessmen who are the party of the supply chain under any trader involved in bogus billing or availing forged GST refunds Get to know about official GST refund process under GST regime as finalized by the GST Council. We have included terms and conditions of all aspects are being penalised by the taxation department despite they not being involved in such scams. On one side the government is giving slogans like make in India or ease of doing business but on the ground the plight of businessmen is pitiable.”