Faking input tax may soon be non-bailable crime: Report

The government may make fraudulent claims for input tax credit a non-bailable offence as a part of tightening the GST law, according to a report by The Economic Times.

Directors or employees directly responsible for making such false claims can also be penalised as per the proposed changes, according to the report. Currently, there are no specific measures to deal with such tax evasion.

"Changes are being proposed to the law to plug issues related to fraud input tax credit," a government official told the publication.

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The news comes after the Department of Revenue identified 931 cases of fraudulent GST refund claims through data analytics. Refunds of over Rs 28,000 crore are said to have been filed by over 27,000 taxpayers so far on account of inverted duty structure in the current financial year.

To curb input tax credit (ITC) frauds, data analytics is to be done on all refunds since 2017, keeping an eye on the modus operandi of unscrupulous refund claimants or fly-by-night or shell business entities for availment of fake ITC, reported PTI.

GST formations have booked 6,641 cases involving 7,164 entities till November last year and have so far recovered around Rs 1,057 crore.

The highest number of such fraud cases have been booked in Kolkata zone, followed by Delhi, Jaipur and Panchkula (Haryana), the sources said adding that a recently detected fraud by central tax authorities in Delhi, involving GST refund for inverted duty structure, was deliberated at the 2nd National Conference on GST last week.