After a nationwide drive against fake invoices that tend to mar the Goods and Services Tax (GST) system, the government is examining if the offenders can be booked under COFEPOSA (Conservation of Foreign Exchange and Prevention of Smuggling Activities Act), apart from taking action against them under GST laws, Income-tax Act and Prevention of Money Laundering Act (PMLA), sources said.
The Centre is also examining whether businesses whose owners or promoters do not have commensurate income tax payment records may require physical and financial verification before their companies can be allowed GST registration.
In the current month itself, at least 25 persons have been arrested, including two kingpins and two professionals in some 350 cases booked for issuance of fake invoices against 1,180 entities. Sources said, “Actual amount of fake input tax credit (ITC) claims involved is being ascertained. Search and investigation are on to identify and apprehend other persons involved and the beneficiaries.”
The fraudulent practices are mainly related to transactions in MS/SS scrap, articles of iron and steel, copper rod and wire, scrap of non-ferrous metals, plastic granules, PVC resin, construction services, readymade garments, among others, sources said. —FE
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