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, sources said.
The government 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.
During 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 1180 entities.
“Actual amount of fake input tax credit (ITC) claims involved is being ascertained. Search and investigation are on to identify and apprehend the other persons who were involved in the racket and also the beneficiaries who have used the fake invoices to evade GST, income tax, and are engaged in money laundering,” sources said.
The fraudulent practises are primarily related to transactions in MS/SS scrap, articles of iron and steel, copper rod and wire, waster and scrap of non-ferrous metals, plastic granules, PVC resin, readymade garments, gold and silver, construction services, works contract, agro products, milk products, mobile, manpower supply services, advertisement and animation services among others, sources said.