Published
Apr 29, 2019
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Government explores CEIB proposal to bring fake GST invoices under PMLA Act

Published
Apr 29, 2019

The government is considering a proposal by the Central Economic Intelligence Bureau to bring fake goods and services tax invoices under the Prevention of Money Laundering Act which would incur higher punishments.

Government agencies have reported high levels of GST evasion and fraud


The CEIB recently made a proposal to the government that it should take stricter measures against businesses creating fake GST invoices to fraudulently claim input tax credit, TNN reported. The CEIB reported that up until December in the 2019 financial year, around Rs 4,000 crore ($601.3 million) was fraudulently obtained in input tax credit received through fake invoices.

The Directorate General of GST Intelligence found tax evasion totalling Rs 29,088 crore in 1,835 cases from April to October 2018, as reported by Mint last year. The investigation arm of the finance ministry’s total only referred to the central level and so the country-wide total would be much greater. 

The CEIB looks into reports conducted by the Directorate of Revenue Intelligence, Enforcement Directorate, Directorate General of GST Intelligence, Income Tax, Central Bureau of Investigation, and other agencies. The bureau has suggested that the government make Section 16 of the GST Act which states that fraudulently obtaining tax credit is illegal a predicate offence under the PMLA. This would make it punishable by imprisonment. 

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