CBIC field units detected Rs 36,374cr worth fake Input Tax credit cases in 2023-24

New Delhi: The tax formations under Central Board of Indirect Taxes and Customs (CBIC) have detected Rs 36,374 crore worth of fake Input Tax credit (ITC) that involved 9,190 cases in the Financial Year 2023-24, Minister of State for Finance Pankaj Chaudhary said in a written reply to a question in the Lok Sabha on Monday.

The figures provided by the minister show a steady rise in the number of detections of such cases from 5,966 in 2021 to 7,231 in 2022-23.

The Minister stated the steps taken by the government to curb the ITC frauds include insertion of a new CGST rule to provide for risk-based biometric-based Aadhaar authentication of registration applicants who appear to be risky based on data analytics.

There has also been an amendment to CGST rules to provide for physical verification in high-risk cases, even when Aadhaar has been authenticated.

Besides, the change in rules requires furnishing a bank account as a part of the registration process to be in the name of the registered person and obtained on PAN of the registered person and also linked with Aadhaar in case of proprietorship firm and that the details of bank account will be required to be furnished within 30 days of grant of registration or before filing of GSTR-1, whichever is earlier.

Restrictions have been imposed on availing of ITC to invoices and debit notes furnished by the supplier in their statement of outward supplies.

The other steps introduced to check ITC frauds include -

* Filing of Form GSTR-1 made mandatory before filing of Form GSTR-3B for a tax period and filing of Form GSTR-1 made mandatorily sequential.

*Making the beneficial owner liable for penal action and prosecution similar to that of actual supplier/recipient, in cases where a supply has been made without the issuance of an invoice, or invoice has been issued without supply, or excess ITC has been availed/distributed.

*Amendment in Section 83 of the CGST Act to provide that provisional attachment of property can be done in respect of any other person who has retained benefits of such transactions.

*Restriction on generation of e-way bills by non- compliant taxpayers.

*Reduction in threshold limit for issue of e-invoice for B2B transactions from Rs 10 crore to Rs 5 crore from August 1, 2023.

*Regular use of data analytics to identify or track risky GST registrations to detect tax evasion.